Top 7 Reasons You May Need an Environmental Attorney, by Cheryl Coon
Monday, August 10, 2009
(This article was original published in the Fort Worth Business Press on August 10, 2009. It is being republished by permission). Copyright 2009 by Cheryl Coon. There are so many attorneys in the business world, why do business managers need someone with specific environmental expertise? It’s a question some clients don’t consider and it could become an expensive mistake. An environmental attorney can help CEOs navigate environmental pitfalls, giving valuable advice early in the planning and decision making process. No one wants to discover a $250,000 problem at a property after closing or learn their indemnity won’t cover the problem. An environmental attorney can help businesses structure transactions so that they meet legal criteria and produce efficient results at the cheapest price. So actually, there are many reasons for choosing an environmental attorney and Cheryl Coon, partner with Shannon, Gracey, Ratliff & Miller, LLP has her top seven reasons why:
1. Environmental attorneys speak the language. Have you ever talked with someone at an agency or an environmental consultant and heard about USTs, APARs, MSDs and HAZWOPERS? An environmental attorney knows the acronyms and the regulatory systems behind them. They can speak with regulators and consultants in their own language and help achieve your goal of getting a job done in the most efficient manner.
2. They know the law. Just like tax law, environmental law is a maze of statutes, regulations, guidance documents and preambles in the Federal Register or the Texas Register. A hazardous substance is not the same as a hazardous waste or a hazardous chemical or a toxic chemical or a hazardous material. Each of these terms has a very specific definition. Each term has its own set of regulations and applicable obligations. An environmental attorney can help you sort out what belongs where.
3. Your decision can save you money. Unfortunately, if you pay only $250 for that Phase I environmental assessment and fail to check credentials or read the engagement agreement or the final report, you may not get anything for your money. A typical Phase I should cost about $1,800 to $2,000 and follow a very specific format set by ASTM (American Society of Testing and Materials) and Environmental Protection Agency regulations. So you saved some money, but the report may not qualify you for the innocent purchaser defense under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), one of the main reasons to do a Phase I in the first place. Moreover, the report may have missed something that will end up costing a lot more, like a leaking underground storage tank. Having an environmental attorney assist in the Phase I process assures that the review will meet appropriate standards. Environmental attorneys can also assist in reviewing Phase I drafts to help ensure the final product is one you wouldn’t mind sharing with a regulator.
4. To save even more money. For certain properties and in certain deals, it may not be the most efficient to start with a Phase I. You may need to look at compliance issues and not just whether there have been releases of hazardous substances at a property. Environmental attorneys can assist with scoping a project, knowing the laws and your goals, which ultimately gets you the information you need and many times in a more economical fashion.
5. Environmental attorneys are specialists. Just 30 minutes of their review on the asset purchase or stock purchase or other agreement may end up protecting you much more than the cost of that review. Review of documents and assisting with the drafting of environmental and related provisions (indemnities) is precision work, as noted above. Just as you would not hire a family practice doctor to do your heart surgery, you should not skip having an environmental attorney involved if there are any environmental issues in a deal. If the environmental attorney has reviewed the due diligence materials and knows your goals, that 30 minute review time will be money well spent.
6. Environmental attorneys know the landscape and what potential issues exist. Sometimes parties assume that if there is a Phase I assessment, the environmental issues have been addressed. The problem with this assumption is that there is an entire world of environmental statutes and regulations at every level, federal, state and local. None of the laws or levels can be ignored. In an acquisition transaction, the scope of issues to be addressed should include compliance issues, permit transfers, and notification, to name some. There are air, water, waste and possibly other areas to consider. Some permits are not transferable or take up to 30 days prior notice to an agency to transfer. Not planning for these contingencies in a transaction may end up costing the client a lot of money and add to frustration levels.
7. Environmental attorneys can make enforcement easier. If you get a notice of violation or have a compliance issue, an environmental attorney, familiar with the statutes and regulations, can guide you through the maze and assist with your defenses and negotiation with the agency. Environmental attorneys know the regulations and the administrative process. They know what defenses or mitigating factors may apply. An environmental attorney, you recall, also speaks the language and can help you understand the system and your potential pathways to resolution.
