Jay Walder’s Vision Of MTA’s Future

 

 On September 22, 2010, the New York League of Conservation Voters Education Fund (“NYLCV Education Fund”) hosted Jay Walder, Chairman of the Metropolitan Transit Authority (“MTA”), at an Eco-Partner Breakfast, a quarterly event at which leaders from around New York State meet to network and discuss issues of environmental concern. Jay Walder was nominated by Governor David A. Patterson on July 14, 2009 and confirmed as chairman and chief executive officer of the MTA on September 10, 2009. We applaud Mr. Walder for his vision and the aggressive steps that he has taken in his one year in office to keep the largest mass transit system in the United States moving in the right direction. Walder has prior experience in public transportation within the MTA, where he previously served as Chief of Staff and later as Executive Director and Chief Financial Officer. Mr. Walder left the MTA in 1995 to teach public policy at the John F. Kennedy School of Government at Harvard. Thereafter, he joined Transport for London, where he was credited with the introduction of that system’s extremely successful “Oyster card” and with leading the transportation charge as part of London’s successful bid for the 2012 Summer Olympics. 

Mr. Walder set the tone for the morning’s discussion by emphasizing the importance of seeking “transformational” change rather than “evolutionary” change at MTA. Mr. Walder identified two significant transformational milestones in the New York subway system. The first occurred in 1982, when the MTA’s first capital program was established. As a New Yorker, Mr. Walder recalled to mind how the New York subway system was considered a symbol of urban decay in the 1970’s, characterized by graffiti, constant breakdowns, oppressive heat in summer and ineffectual heating in winter. As a result of capital improvements, today’s subway system no longer suffers from the systemic problems of the 1970’s. He points out that there was a breakdown every 7,000 system miles in the 1970’s as compared to today when there is a breakdown only every 150,000 miles. 

The second transformational milestone was the introduction of the MetroCard in 1991. As a result of the MetroCard’s introduction, tokens became relics of the past, and monthly and weekly passes and automatic bus/rail transfers became a pleasant reality. Subway ridership increased from 3.5 million riders daily in 1992 to over 5 million riders daily today. Although the MTA has been criticized for recently announced service cuts, Mr. Walder has made significant strides in his one year in office in reducing MTA’s annual operating budget. This cost-cutting initiative has resulted in the removal of 3,500 jobs, a reduction by 20% of positions at MTA HQ, reduction in overtime, consolidation of functions and renegotiation of contracts with vendors. MTA is now introducing “countdown” clocks in subway stations to remove rider angst over train delays and to make New Yorkers’ long-time habit of constantly looking over the edge of the platform toward the tunnel for the next train a thing of the past.

 

Cas Holloway Brings Energy And Vision To NYC’s DEP

On February 26, 2010, the New York League of Conservation Voters (“NYLCV”) hosted an Eco-Partners Breakfast with New York City Department of Environmental Protection (“DEP”) Commissioner Cas Holloway, DEP’s energetic new commissioner.  Mayor Bloomberg appointed Mr. Holloway to head DEP in November 2009 after a year long nation-wide search. Prior to his appointment, Mr. Holloway served as a Senior Advisor and Chief of Staff to Ed Skyler, New York’s Deputy Mayor for Operations. Mr. Holloway, a former Cravath associate who earned an undergraduate degree at Harvard and a law degree from the University of Chicago, brings to the position a rare combination of political savvy and operational know how that should serve DEP well.  Although DEP has a $1,000,000 budget and a staff of over six thousand, it often flies below the radar screen. DEP performs four basic functions. (1) First and foremost, it is a water utility. It is responsible for the supply, distribution and treatment of New York City’s drinking water. Unlike California, which delegates the supply and treatment functions to different agencies, both functions fall within DEP’s  aegis in New York; (2) DEP is a customer service agency. It more or less determines the price of water; (3) DEP is a capital projects agency. For example, it is building at a cost of $6,000,000,000 the third underground tunnel that will carry drinking water from upstate to millions of New Yorkers; and (4) DEP is an environmental regulator on, among other things, air and water issues.   Based upon his first few months on the job, Cas Holloway appreciates the importance of working with various stakeholders and interest groups. On February 25, 2010, Mayor Bloomberg, Mr. Holloway’s agency,  NYS Department of Environmental Conservation and several environmental groups announced an agreement-in-principle to significantly improve the health of Jamaica Bay through sewage treatment plant upgrades and investments in marsh restoration. As a result of the agreement-in-principle, DEP headed off a potentially costly Clean Water Act litigation arising from the alleged failure of its four sewage treatment plants to prevent nitrogen discharges to the bay. Mr. Holloway described the resolution of the Jamaica Bay dispute as a "paradigm shift" and a case study for how he hopes DEP will resolve future disputes. Up next for Mr. Holloway is the threat to water quality in the New York City Watershed posed by natural gas companies  seeking permits to exploit valuable natural gas deposits in the Marcellus Shale through the extensive use horizontal drilling and hydrofracking.  All New Yorkers should wish Mr. Holloway well in addressing this new Watershed concern.

My Old Sony Trinitron Is Not A CERCLA Waste!

Virtually everyone believes that it is good public policy to encourage the recycling of old electronic products, including computers, cathode ray tubes, televisions, printers and portable music devices.  Nearly 20 states have e-waste laws on the books.  However, New York City recently enacted an e-recycling law (over Mayor Bloomberg’s veto), the first municipality in the United States to do so, that is so overly aggressive and costly that trade associations for the electronics industry have filed suit to block the law’s implementation.  Under the law, if a television manufacturer is apprised, for example, that a homeowner on East 87th Street is desirous of recycling his 15 year old television, the manufacturer is required to make a special trip to pick it up on East 87th Street, regardless of the fact that the cost of this pick-up may be prohibitively expensive and  was never factored into the cost of the television when it was sold for $279.99 at Best Buy in 1994.  Worse, if the television is an “orphan”, for whom no manufacturer currently doing business can be identified, there is still an obligation to drive up to East 87th Street and haul it away.  My own Sony Trinitron is more over 15 years old having provided me with flawless service from the day I brought it home from The Wiz in Herald Square.  But I hardly expect Sony to drive to my house to pick it up all these years later!  For goodness sakes!  It’s a television set, not a hazardous CERLCA waste!  This law appears to confuse the CERLCA statute, which holds generators of waste responsible for their disposal practices years after the fact, and the sale of a useful product, such as a television, since there you can enjoy movies and series, even more if you get a quality cable or satellite service, which you can get from the AAA Satellite in Kansas City that offer a good quality service for this.  A worthwhile discussion of the dispute, with some helpful background links, can be found in Meline MacCurdy’s article of Aug. 12, 2009 in the Marten Law Group’s Environmental News titled, “Electronic Manufacturers Challenge New York City E-Waste Law.”

The electronic industry alleges that this program will cost manufacturers over $200,000,000 per year and that, on a per pound basis, the cost of collection alone will be ten times more expensive that the total cost of collection and recycling in California and Maine, two states that have promulgated e-recycling statutes.  Among other arguments, the manufacturers allege that the NYC statute violates the equal protection clause of the Constitution by targeting only certain types of electronic equipment while excluding other electronic equipment containing the same types of potentially harmful substances, and constitutes a regulatory taking and violates the manufacturers’ substantive due process rights.    Some e-recycling advocates and environmentalists are concerned that this lawsuit may represent the first step of an attempted roll-back by industry of the e-recycling strides made in other states.  The Electronic TakeBack Coalition, whose motto is “Take it Back, Make it Green, Recycle Responsibly,” has issued a call-to-arms on its web-site, “Electronic Industry Attacks Product Stewardship with Lawsuit in New York City“. If interested in reviewing the pleadings filed in the lawsuit, the Electronic TakeBack Coalition web-site is a great resource.  Unfortunately, this entire controversy does nothing to advance the cause of e-recycling.  If the New York legislature enacted a state-wide e-recycling measure, which is what is needed here,  NYC could gracefully withdraw from the fray by rescinding its Draconian measure and permit the state legislation to  take effect.

Environmental Champions!

At last night’s Spring Gala for the New York League of Conservation Voters ("NYLCV"), former New York Governor George Pataki and Mayor Michael Bloomberg received well-deserved standing ovations from both environmental activists and business leaders for their truly heroic accomplishments on the tough environmental issues New York faces.  It is rare that I come home completely inspired and renewed after listening to speeches, but that is precisely how Mr. Pataki and Mr. Bloomberg made me feel.  Based upon his exemplary record as New York’s governor, Mr. Pataki should give consideration to running for the U.S. Senate seat left vacant when Senator Clinton became Secretary of State.  Senator Kirsten Gillibrand is terrific (she delivered last night’s keynote address), but she would be challenged to match Mr. Pataki’s charisma and his record.  The prospect of having the strongest environmental governor in New York’s history representing the State in the Senate, particularly on the Republican side of the aisle, would be potentially transformative were Mr. Pataki to bring to Washington the passion for the causes he championed in  Albany.  Paul Elston, NYLCV’s Founding Board Chair, was right when he said last night that George Pataki forced environmentalists to change how they dealt with politicians.  Previously, environmentalists prodded the politicians to adopt pro-environmental policies.  After Mr. Pataki became governor, environmentalist had to run just to keep up with Mr. Pataki’s broad-based initiatives, according to Mr. Elston.  Mr. Pataki’s legacy resides in every sip of water New Yorkers drink (because of his historic efforts to protect the upstate watershed as a pristine source of our water) and in every breath of air public school children inhale (due to Clean Air/Clean Water Bond Act funds used to replace out-dated and dangerous coal-burning furnaces in the City’s schools. 

A New Era For Private Cost Recovery Litigation?

In its precedent breaking decision in United States v. Atlantic Research Corporation, decided in June 2007,  the United States Supreme Court held that the plain language of CERCLA  §107(a)(4)(B) authorizes any private party, including PRPs, to commence an environmental cost recovery action.  The Supreme Court added as dictum that it  “assume[d] without deciding”  that §107(a) provided these PRP plaintiffs with the right to pursue a claim for joint and several liability.   CERCLA  §107 is a strict liability scheme that permits a plaintiff to seek joint and several liability without the burden of proving causation.  Prior to Atlantic Research, only the United States or an “innocent landowner” could wield §107’s heavy club.  In the wake of Atlantic Research, any PRP (i.e. polluter) can bring a §107 claim against other PRPs to recover costs.  The only exception is that PRPs who have been defendants in actions brought against them by the United States pursuant to CERCLA  §106 or  §107 must pursue their recovery pursuant to §113, which only permits the recovery of costs on a pro rata basis via contribution.  To those unlucky plaintiffs, §107 is not available.

Are we at the dawn of a new era of private cost recovery litigation?  In traditional §113 actions, the PRP plaintiff has the burden of demonstrating that neither plaintiff nor third parties bear any percentage allocation of responsibility for the cleanup costs at issue.  If this burden now passes from the plaintiff to defendants, defendants may be disinclined to run the risk of being held jointly and severally liable for all of a site’s cleanup costs in the event that their proof falls short.  This risk factor should make defendants more willing to come to the bargaining table earlier.  The same risk consideration should motivate corporate PRP plaintiffs to file §107 suits rather than to let grass grow under their feet.

In weighing possible unfairness to §107 defendants, the Supreme Court noted that  a defendant PRP in  a §107 suit could blunt any inequitable distribution of costs by filing a §113(f) counter-claim.  Thus, once CERCLA liability is established, defendants may avoid joint and several liability by establishing that they caused only a divisible portion of harm. Of course, this course of action is easier said than done and requires a significant commitment of legal manpower to see through to the end.  One court recognized that by providing a RPP with an opportunity to pursue joint and several liability against other PRPs, §107 further encourages a PRP to quickly and voluntarily cleanup a site in the hopes that it might recover its response costs from other PRPs. Raytheon Aircraft Company v. United States, 532 F.Supp. 2d 1306, 1310 (holding that the Court’s decision to permit plaintiff-PRP to pursue joint and several liability under §107(a) found support in Atlantic Research).  In my judgment, the environmental bar should expect that a large number of cost recovery cases will be filed over the next 12 months.