Monday, March 24, 2014

U.S. SENATE ATTACKS ALGAE!


In February, the U.S. Senate made a bold move to legislate a fight against harmful effects of algae blooms on fish. It passed S. 1254, a bill whose title has a bit of a bloom itself--the "Harmful Algal Bloom and Hypoxia Research and Control Amendments Act."

The subject blooms, of course, are the growth of blue-green algae in waterbodies, and hypoxia is the depletion of oxygen in waterbodies--which can be caused by the die-off of algae blooms. The bill would require the Under Secretary of Commerce for Oceans and Atmosphere (another title bloom) to establish a task force to study algae and causes of hypoxia, to create an action plan and to report to Congress. The bill would provide $92 million to fund the project.

It is good to learn that Congress apparently has made algae a high priority concern and has taken such positive action to address the issue. On the other hand, one wonders whether it will be as decisive in dealing with such issues as the economy, unemployment, national debt, defense, the budget and foreign policy, to name a few. These "blooms" may be more difficult to control.

Friday, March 14, 2014

CAN POLLUTION NOT BE POLLUTION?


Some times, court decisions can be difficult to understand and explain. For example, recently an appellate court in essence held that pollution is not pollution.

Neighbors of a hog confinement facility sued the operators of the facility and owners of land on which hog manure was applied. Plaintiffs complained that odors were a nuisance that were causing loss of enjoyment of their property. The operators' insurance company declined to defend the suit, citing the "pollution exclusion" provision in the operators' umbrella insurance policy.

The Appellate Court held that the pollution exclusion did not apply because the alleged odor pollution was not "traditional pollution." * The Court relied upon a prior state Supreme COurt decision which held that: "Given the historical background of the absolute pollution exclusion and the drafters' continued use of environmental terms of art, we hold that the exclusion applied only to those injures caused by traditional environmental pollution." The Supreme Court did not define "traditional pollution", but found that the accidental release of carbon monoxide due to a broken furnace does not constitute the type of environmental pollution contemplated by the pollution exclusion provision. **

Te Appellate Court stated that "we do not find the hogs, their manure, nor the smells associated with these things constitute traditional environmental pollution." The Court acknowledged that the state Environmental Protection Act deemed odor a contaminant that would constitute air pollution if it unreasonably interfered with the enjoyment of life or property. However, it said, "even if the odors at issue in this case constituted air pollution for purposes of the Act, this does not mean the odors constitute 'traditional environmental pollution.'...Generally speaking, the scope of the things seen as hazardous to the environment, as reflected in environmental protection laws today, is far greater than what wee conclude our supreme court had in mind when it spoke of 'traditional environmental pollution.'"

If odors associated with hog processing do not constitute "traditional pollution", does this mean that odors from a wastewater treatment facility also do not constitute "traditional pollution?" In any case, how can any allegation of a violation of environmental statutes or regulation not be deemed "traditional pollution" when those laws essentially define what is "traditional pollution."? Or does all of this mean that , if sewage odors do not constitute "traditional pollution", then the only basis for challenging odor is through a nuisance theory, not through regulatory air pollution violation?

Some times, court decisions are difficult to understand and explain.

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* Country Mutual Insurance Company v. Hilltop View,
2013 Ill.App.(4th)130124

** American States Insurance Co. v. Koloms,
177 Ill.2d 473 (1997)

Wednesday, March 5, 2014

NO END TO CONTRACTS?


Water utility operations and services are governed by contracts with suppliers, employees, customers, consultants, engineers, accountants and even lawyers. The importance of crafting carefully such contracts, therefore, cannot be overstated. Sometimes, however, oversight or carelessness in drafting can cause unintended results--often by reason of a court decision.

For example, a recent state appellate court decision involved a contract between a manufacturer and a sales representative for the manufacturer. The termination provision of the contract stated that the contract may be terminated only by the written agreement of both parties. The manufacturer sued, requesting a judicial ruling that it could terminate the contract unilaterally because the termination provision was unenforceable. It also stated that it was not represented by counsel during the negotiation and drafting of the contract.

In its decision, the Appellate Court stated that a contract that is terminable only upon the mutual agreement of the parties is indefinite in duration, and that state public policy prohibits contracts of indefinite duration. Therefore, the Court held that "as a result, a sales representative agreement terminable only upon the mutual agreement of the parties is not sufficiently definite in duration and in terminable at will." *

It bears repeating: contracts can be structured with care and clearly stating the parties' intent--with the assistance of counsel, or contracts may be structured by subsequent court decisions with possible unintended results for the parties. The choice should be obvious.
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*Rico Industries, Inc. v. TLC Group, Inc,
2014 IL.App. (1st)131522