WHO REMEMBERS THE WATER?

We are told that water is valuable: that water is essential for all life--human, animal and vegetation; that water is essential for public health; that water is essential for public safety and fire protection; that water is essential for cleanliness; and that water is essential for production of food, goods and services. But, who remembers the water that we use? Who remembers the water in our shower this morning or any of yesterdays' mornings? Who remembers the water that is flushed down our toilets? Who remembers the water that made our coffee and tea during any day? Who remembers the water we sprayed on the garden or splashed down the driveway when we washed our car? Who remembers our first glass of water or any glass of water, for that matter? Who remembers the water churning in our washing machine or in our dishwasher? Who remembers the water that cleaned our floor and then was washed down the drain? Who remembers the water that was used to make soup or to wash the vegetables that went into the soup? So, who remembers water? If water really is valuable, how come we do not remember using it, yet alone protecting it like our other valuables? Maybe we will not value water, and remember it, until it is disappears.

INSURANCE POLLUTION EXCLUSION APPLIED TO WATER SUPPLY CONTAMINATION

Certain residents sued their village and village officials seeking damages for alleged contamination of water furnished by the municipal water system. The village continued to use for many years a well contaminated by perc, a dry cleaning solvent, which had migrated into the soil and ground water. The state also sued the village to compel remediation.

The insurer for the village sued in federal court for a declaration that the insurer had no duty to defend the suits against the village or to indemnify the village if the residents and the state should prevail in their suits.

The insurance policies at issue were public entity general liability policies issued to municipalities. They contained a pollution exclusion of the same kind found in commercial general liability policies. The pollution exclusion excluded from coverage bodily injuries, property damage and personal injuries arising from the discharge and dispersal of pollutants and also excluded expenses arising from orders to clean up or respond to the effects of pollution.

THe federal Seventh Court of Appeals affirmed the District Court holding that the pollution exclusion applied to relieve the insurers from any responsibility for the suits by the residents and the state against the village. The Court stated: "There is no doubt that perc is a 'contaminant' within the meaning of the policies; and the tort plaintiffs are complaining about its 'dispersal' by the Village from the contaminated well to their homes via the system of water mains that connects the well to the homes."

THe Court explained that a prime rationale for the pollution exclusion relates to the impossibility of adjusting insurance premiums for the greater risk of loss potential from high risk insurance customers. Thus, the exclusion forces high risk potential polluters to self identify by buying pollution coverage. (Scottsdale Indemnity Co. and National Casualty Co. v. Village of Crestwood, US Ct App, 7th Cir., Nos. 11-2385, 11-2556,11-2583, March 12, 2012)

The lesson of this decision for a water utility, of course, is twofold: first, read and understand the utility's general liability policy, including the pollution exclusion; and second, purchase a pollution coverage rider sufficient to cover potential contamination issues.

DOES EPA HAVE JURISDICTION OVER YOUR BIRDBATH?

With the media frenzy during the recent Supreme Court oral argument in the "Obamacare" case, an important Supreme Court decision issued also in March largely was ignored.

A couple owned a 2/3 acre residential lot in Idaho, near a lake but separated from it by several lots containing permanent structures. To prepare their lot for construction of a house, they caused a portion of the lot to be filled with dirt and rock.

Months later, the couple received a compliance order from EPA. The order found that the lot contained wetlands adjacent to the lake, that the lake is a "navigable water," that the couple discharged fill material into wetlands on the site, and that they caused fill material to enter into waters of the United States and thereby discharged pollutants from a point source-a violation of the federal Clean Water Act. The compliance order demanded restoration of the lot.

The Clean Water Act provides for a civil penalty of up to $37,500 per day of violation. If a party fails to comply with a compliance order, the penalty increases to up to a total of $75,000 per day of non-compliance.

The couple believed that their lot is not subject to the Clean Water Act. However, their request for a hearing before EPA was denied. Accordingly, the couple filed suit in federal District Court for judicial review under the federal Administrative Procedure Act claiming that the compliance order was arbitrary and capricious and denied due process. The District Court dismissed the complaint and the Court of Appeals affirmed, concluding that the Clean Water Act precludes judicial review of EPA compliance orders. The Supreme Court then agreed to hear the case.

Before the Supreme Court, EPA argued that there can be no judicial review of its compliance orders. The Supreme Court unanimously disagreed, holding that the compliance order in this case is a final agency action for which there is no adequate remedy other than review under the Administrative Procedure Act, and the Clean Water Act does not preclude such review.
Justice Scalia wrote:"there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of
regulated parties into 'voluntary compliance' without the opportunity for judicial review-even judicial review of the question whether the regulated party is within EPA's jurisdiction."

In a concurring opinion, Justice Alito was blunt: "The position taken in this case by the Federal Government-a position that the Court now squarely rejects-would have put the property rights of ordinary Americans entirely at the mercy of Environmental Protection Agency (EPA) employees."

The appeal before the Supreme Court involved only the right to judicial review of an agency order, not the shadowy question whether the couple's lot in fact is a jurisdictional wetland. That question presumably will be addressed by the remand to the lower courts and ultimately may wind up in the Supreme Court again. However, the Court's decision allowing judicial review of the compliance order suggests its response to regulatory orders and mandates imposed without due process protections. (Sackett v. Environmental Protection Agency, Supreme Court No. 10-1062, March 21, 2012)

So. could EPA have jurisdiction over your birdbath? The question may not be just for the birds.

HOPPING DOWN THE EASTER BUNNY TRIAL

Two men, a grade school administrator and his friend, were driving around western New York during the Easter school break. One morning, they stopped for breakfast at a local cafe in a small town. There, they saw a young girl dressed in her Easter finery.

The men decided to treat the girl by getting their Easter bunny mask from their van. So, one of the men retrieved the mask, put the bunny head on and waved at the girl through a front window of the cafe. Then, he removed the mask, put it back in the van and resumed his breakfast in the cafe.

The rabbit head was a full size, 1 1/2 to 2 foot high paper-mache mask which covered a person's entire head. It had pipe-cleaner whiskers, large eyelets and enormous pink ears.

Shortly, a local bank employee called the sheriff's office to report that a customer had come into the bank with her granddaughter and said that they had just seen the Easter bunny outside the bank. The bank employee also told the sheriff that another person came into the bank saying that a man had got out of a van wearing a rabbit head and had looked into the bank's windows.

Believing the two men were bank robbers, a sheriff's officer then issued an all points bulletin (APB) to pick up and hold the two men, with a warning that they were armed and dangerous. In response to the APB, the two men were arrested at gunpoint by state police in a nearby town, hand cuffed and transported back to the sheriff's office.

After being held and questioned for almost 3 hours, the men were released, and no charges were filed. It seems that, as the men traveled into each county, they would stop and take a photo of one of them wearing the rabbit head next to the county road sign. They also had a seven foot stuffed dog in the van for the same purpose.

Subsequently, the men filed a civil rights action in federal court claiming that they were arrested without probable cause, in violation of their constitutional rights. The court found that there had been no probable cause for their arrest. (Wagner v. County of Cattaraugus, 866 F. Supp. 709, W.D.N.Y. 1994)


So, if you see the Easter bunny waving at your window, it may not be a hare raising experience after all. But if it were, the Easter bunny may well find a hare in legal soup.