BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 2748
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|Author: |Gatto |
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|Version: |6/2/2016 |Hearing | 6/29/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|Rachel Machi Wagoner |
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SUBJECT: Environmental disaster: release of claims: statute of
limitations: attorneys' fees.
ANALYSIS:
1) Existing law provides that an obligation is extinguished by a
release given to the debtor by the creditor, upon a new
consideration, or in writing, with or without new
consideration. A general release does not extend to claims the
creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or
her must have materially affected his or her settlement with
the debtor.
2) Under this bill, a partial or interim payment or
reimbursement, made in connection with an environmental
disaster by the responsible polluter or any agent or entity
related to the responsible polluter to any recipient, does not
release the polluter from liability to the recipient for any
claim related to the environmental disaster or for any future
claim by the recipient against the polluter, or for both
current and future claims.
3) This bill prohibits any such partial or interim payment or
reimbursement from being conditioned upon the recipient's
agreement to release the polluter from liability for any
current or future claim.
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4) This bill would allow such a payment or reimbursement to any
recipient to be credited against the liability of the
polluter, agent, or entity to the recipient for any current or
future claim that is related to the environmental disaster.
5) Under this bill, a temporary or final settlement of any kind
made in connection with an environmental disaster by the
responsible polluter or any agent or entity related to the
responsible polluter, to any claimant, would release the
responsible polluter, agent, or entity from liability to the
claimant only for acts, omissions, or injuries that are
believed by the claimant to have occurred prior to the date of
the settlement, and would not release any claim that is
unknown to the claimant at the time of the settlement, occurs
subsequent to the settlement, or that is unrelated to the
environmental disaster.
6) The bill makes any agreement in violation of those
prohibitions that is entered into on or after February 1,
2017, void as a matter of law and against public policy.
7) Existing law establishes statutes of limitations for civil
actions for injury or illness or wrongful death based upon
exposure to a hazardous material or toxic substance other than
asbestos, as specified. For injury or illness, the statute of
limitations is 2 years from the date of injury, or 2 years
after the plaintiff becomes aware of, or reasonably should
have become aware of, an injury, the physical cause of the
injury, and sufficient facts to put a reasonable person on
inquiry notice that the injury was caused or contributed to by
the wrongful act of another, whichever occurs later. For
wrongful death, the statute of limitations is no later than
either 2 years from the date of the death of the plaintiff's
decedent, or 2 years from the first date on which the
plaintiff is aware of, or reasonably should have become aware
of, the physical cause of the death and sufficient facts to
put a reasonable person on inquiry notice that the death was
caused or contributed to by the wrongful act of another,
whichever occurs later.
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8) This bill, notwithstanding the above provision, establishes a
statute of limitations of 3 years for specified civil actions
for injury, illness, or wrongful death based upon exposure to
a hazardous material or toxic substance other than asbestos.
9) Under existing law, except as attorneys' fees are specifically
provided for by statute, the measure and mode of compensation
of attorneys is left to the agreement of the parties.
10)This bill authorizes the courts, in any action for private
nuisance against an environmental polluter defendant arising
out of an environmental disaster for which the defendant has
been adjudged civilly liable, upon motion, to award reasonable
attorneys' fees to a prevailing plaintiff against the
defendant.
11)This bill would limit the application of its provisions to the
Porter Ranch area, as defined, or contamination surrounding
the Exide Technologies facility in the City of Vernon.
Background
Two sites of significant environmental contamination have
featured repeatedly in the media this year: the release of
natural gas from an underground storage facility in Porter Ranch,
and the environmental impacts related to decades-long operation
of a battery recycling facility in Vernon. The leak at Porter
Ranch, first detected on October 23, 2015, came from one of 115
wells connected to the fifth largest underground natural gas
storage facility in the United States. Southern California Gas
Company, who owns the facility, made several attempts to stop the
leak, but was unsuccessful in its efforts until February 18,
2016, by which time almost 100,000 tonnes of methane had escaped
into the atmosphere. Concerns over the health impacts from the
release led to the evacuation of 11,000 residents and a
declaration of a state of emergency by Governor Brown. According
to the BBC, "[a]t its peak, the flow doubled the rate of methane
emissions from the entire Los Angeles basin," and the "impact on
the climate is said to be the equivalent of the annual emissions
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of half a million cars." The scale of the leak makes it the
largest in U.S. history, and, according to researchers, "had a
far bigger warming effect than the BP oil spill in the Gulf of
Mexico in 2010."
The contamination resulting from smelter operations in the City
of Vernon by Exide Technologies, by contrast, continued over a
significantly longer period of time. Exide melts down more than
22 million batteries each year, to recycle and reuse the lead in
them. It's run the Vernon facility since 2000, but one company
or another has been doing the same work there for more than 90
years. For nearly three decades, the Department of Toxic
Substances Control allowed the plant to operate on interim permit
status. The South Coast Air Quality Management District has
cited the plant at least 41 times since 2003, often for excessive
lead emissions, and the District reported in March of 2013 that
"arsenic emissions from the plant created an elevated risk of
cancer in an area stretching from Boyle Heights to Huntington
Park.
More recently, as reported by the Los Angeles Times, "[as]
demands to close the plant mounted from community groups and
elected officials, the company revealed in 2014 it was under
federal criminal investigation," and in March of 2015, "the
company signed an agreement with the U.S. attorney's office to
close [the site] permanently." Under the terms of that
agreement, "Exide and its employees [will] avoid prosecution for
years of environmental crimes, including illegal storage,
disposal and shipment of hazardous waste, while agreeing to pay
$50 million to demolish and clean the plant and surrounding
communities, including $9 million set aside for removing lead
from homes."
This bill would enact specified procedural changes that allow
individuals harmed by these two environmental catastrophes to
seek awards of attorney fees, as well as additional time to bring
civil actions. This bill would also limit the ability of
responsible polluters to limit their civil liability by offering
litigants certain payments in advance of litigation or through
settlement agreements.
Comments
1) Purpose of Bill. The author states:
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Between the devastating Exide battery plant lead contamination
disaster in Boyle Heights and the natural gas leak at the Aliso
Canyon storage field, the last year has shed light on the lack
of sufficient legal remedies to help victims deal with the
ramifications of environmental disasters. In the case of the
Aliso Canyon gas well leak, according to the Environmental
Defense Fund, 96,000 metric tons of methane, a powerful climate
pollutant, is estimated to have been released into the
atmosphere as a result of the leak, having the same 20-year
climate impact as burning nearly one billion gallons of
gasoline. In the months following detection of the leak,
thousands of residents were relocated to temporary housing.
Many reported health issues such as headaches, nausea,
nosebleeds and dizziness.
At this point, it is difficult to know what the long-term
effects of the nearly six-month leak on the local environment
and population will be. Researchers at USC intend to study the
long-term health effects of the gas leak on area residents, but
given the fact that the long- term effects of the chemical
exposure are largely unknown, residents of Porter Ranch may not
know for years how and if they have been injured by the gas
leak. Other types of environmental disasters likely bear
similar threat to communities and therefore deserve the same
relief.
AB 2748 endeavors to provide victims of environmental disasters
better access to remedies available to them through our
judicial system. This legislation has taken the lessons
learned as a result of these most recent environmental crises
in the state, to provide legal relief to not only those who
have already suffered, but also future victims of serious,
catastrophic pollution. . . . The bill offers three provisions
to provide key protections to those who suffered from the
environmental catastrophes in the Porter Ranch area and
surrounding the Exide Technologies facility in the City of
Vernon:
first, the proposed legislation will ensure that any
temporary or final settlement made in connection with an
environmental disaster shall not release any claim that is
unknown to the claimant at the time of the settlement,
occurs subsequent to the settlement, or that is unrelated to
the environmental disaster;
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second, the bill will extend the current statute of
limitations for civil actions for injury or illness or
wrongful death based upon exposure to a hazardous material
or toxic substance to three years; and
third, it will authorize the court to award reasonable
attorneys' fees to a prevailing plaintiff against the
defendant for residents who bring private actions.
1) Good for some but not all? The author has outlined the
devastation and havoc that the above environmental disasters
have caused for the communities around the sites and is
proposing the changes to law in this bill to protect these
communities into the future. But if this is good public
protection policy for the communities in these two areas,
shouldn't the Legislature provide the same protections for
other communities that may be similarly affected by future
environmental disasters? It is unclear why this bill is
limited to Porter Ranch and Exide. The committee may wish to
amend the bill to make it statewide policy.
Related/Prior Legislation
Related Pending Legislation :
SB 887 (Pavley, 2016) would provide a framework for reforming
oversight of natural gas storage facilities by, among other
things, mandating minimum standards for gas storage well
inspections, monitoring, and testing; training of personnel; leak
monitoring, planning for emergency response; developing and
incorporating best practices into regulations; and an assessment
of risk to determine setback distances for gas storage wells.
This bill is pending in the Assembly Committee on Natural
Resources.
SB 1304 (Huff, 2016) authorizes the board of supervisors of a
county to provide for reassessment of property destroyed or
damaged by a major misfortune or calamity in an area or region
subsequently proclaimed by the Governor to be in a state of
emergency, and specifies that "damage" includes a diminution in
the value of property as a result of environmental contamination.
This bill is pending in the Assembly Committee on Revenue and
Taxation.
AB 1902 (Wilk, 2016) would establish a 3 year statute of
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limitations for commencing a civil action for injury, illness, or
wrongful death based on exposure to methane, benzene, mercaptan,
or any other hazardous material or toxic substance resulting from
the Southern California Gas Company Aliso Canyon SS-25 gas leak,
as specified. This bill is pending in the Assembly Judiciary
Committee.
AB 1903 (Wilk, 2016) would require the Public Utilities
Commission to authorize a study by the Office of Environmental
Health Hazard Assessment of the long-term health impacts of the
significant natural gas leak from the Aliso Canyon natural gas
storage facility located in the County of Los Angeles that
started on approximately October 23, 2015, as specified. This
bill is pending in the Senate Appropriations Committee.
AB 1904 (Wilk, 2016) would require the Office of Environmental
Health Hazard Assessment to submit a report to the Legislature,
on or before January 1, 2019, that includes an assessment of the
danger of odorants currently used in natural gas storage
facilities in the state to public health and safety and the
environment, and that identifies alternative odorants for
possible use in natural gas storage facilities, as specified.
This bill is pending in the Senate Committee on Rules.
AB 1905 (Wilk, 2016) would require the Secretary of the Natural
Resources Agency, on or before July 1, 2017, to commission an
independent scientific study on natural gas injection and storage
practices and facilities. This bill was held under submission by
the Assembly Committee on Appropriations.
AB 2153 (C. Garcia, 2016) would, among other things, require a
manufacturer of lead-acid batteries to remit to the State Board
of Equalization a manufacturer battery fee of $1 for each
lead-acid battery it sells for deposit into the Lead-Acid Battery
Cleanup Fund, as specified, and would provide for certain credits
against liability for a person who remits manufacturer battery
fees if that person is held responsible by any court, regional
board, agency, or any other authority for certain hazardous
substance violations. This bill is pending in the Senate
Committee on Environmental Quality.
Prior Legislation :
SB 93 (de León, Chapter 9, Statutes of 2015) requires the
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Director of Finance to transfer up to $176,600,000 as a loan from
the General Fund to the Toxic Substances Control Account for the
Department of Toxic Substances Control to use for activities
related to the lead contamination in the communities surrounding
the Exide Technologies facility in the City of Vernon.
SB 380 (Pavley, Chapter 14, Statutes of 2016) among other things,
continues a moratorium on injection of natural gas at the Aliso
Canyon gas storage facility until specified criteria are met,
requires the feasibility of the storage facility to be addressed
and requires the California Public Utilities Commission, with
input from others, to determine the amount of gas necessary at
the facility for safety, regional reliability and to ensure just
and reasonable rates.
AB 118 (Santiago, Chapter 10, Statutes of 2016) appropriates
$176,600,000 from the Toxic Substances Control Account in the
General Fund to the Department of Toxic Substances Control for
activities related to the cleanup and investigation of
lead-contaminated properties in the communities surrounding the
Exide Technologies facility in the City of Vernon, including job
training activities, and actions taken to pursue all available
remedies against potentially responsible parties.
DOUBLE REFERRAL:
This measure was heard in Senate Judiciary Committee on June 21,
2016. It passed out of committee with a vote of 4-2.
SOURCE: Author
SUPPORT:
California Coastal Protection Network
California Labor Federation
California League of Conservation Voters
Clean Water Action
Coalition for Clean Air
Consumer Attorneys of California
Courage Campaign
Environmental Justice Coalition for Water
Environmental Working Group
Food and Water Watch
Natural Resources Defense Council
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Sierra Club California
State Building and Construction Trades Council, AFL-CIO
Trust for Public Land
Wholly H2O
OPPOSITION:
American Chemistry Council
American Insurance Association
California Chamber of Commerce
California Independent Petroleum Association
California League of Food Processors
California Manufacturers and Technology Association
California Metals Coalition
California Railroad Industry
Chemical Industry Council of California
Civil Justice Association of California
National Federation of Independent Business
Western Plant Health Association
Western Plastics Association
Western States Petroleum Association
ARGUMENTS IN
SUPPORT: A coalition of environmental groups, writing in
support, states:
[c]urrently, polluters that cause environmental disasters can
condition any sort of aid on a waiver of liability for their
harms. This limits the relief of those who have been wronged
at their most desperate hour. When a person is forced out of
their home and has nowhere to turn, it is unconscionable to
condition an offering of shelter by a guilty polluter on a
waiver of the right to sue. This bill does not, however, limit
the ability for parties to reach a final settlement once a
claim is actually brought to court and is consistent with a
preference for settlements being reached where justice is best
served.
Another issue is that final settlements can lead to a waiver of
any future claims that arise from the disaster. Families
should not surrender future claims for unforeseen harms that
arise later when settling current claims. Settling for a harm
to personal property today should not be contingent on waiving
a future claim for health problems a family may discover later
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on. This is not reopening claims that have already been
settled, but rather it is not allowing polluters to escape
liability because citizens seek a settlement today, not
contemplating the horrific problems that may arise later.
ARGUMENTS IN OPPOSITION:
A coalition of business groups, writing in opposition, states:
Release clauses are one of the primary incentives for
defendants to settle disputes and avoid prolonged, expensive
litigation. Indeed, California law and case law both recognize
the ability for parties to contract to extinguish claims (See,
e.g., Civil Code §1541). The Civil Code also states that a
general release does not extend to claims which the person
granting the release does not know or suspect to exist in his
or her favor at the time of executing the release (Civil Code
§1542). Notwithstanding this provision, parties to a dispute
are permitted to agree to waive the protections of Civil Code
Section 1542, which must be accompanied by evidence that the
releasing party intended to release unknown claims. (McCray v.
Casual Comer, Inc. (C.D. Cal. 1992) 812 F.Supp. 1046). It is
critical to preserve litigants' ability to waive Section 1542
to maximize the potential to settle potential litigation.
Indeed, when a business settles a claim with a party, the
business should have certainty that the same party will not sue
the business the day after a settlement is reached regarding a
claim that could have been raised at the time of settlement.
Yet, AB 2748 would essentially assure such an outcome, thereby
eliminating the incentive to settle. . . . Parties should be
permitted to enter into a mutually agreeable settlement to
avoid prolonged litigation and thus promote the long-held
California policy to encourage settlement over litigation;
however, AB 2748 attempts to dictate contractual provisions
and, in doing so, will guarantee an influx of litigation.
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