“In States We Trust? The Effect of Canandyne-Georgia v. Nationsbank, N.A. (South) on Liability Under the CERCLA Superfund.”

This comment was written by former staff member Jonathan Gray and appeared in JNREL Vol. 21 No. 1. This abstract was written by staff member Stephanie Wurdock.

In 1980, Congress passed the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") as a response to the Love Canal Disaster and its fallout. CERCLA provides the government with the tools to enforce cleanup of hazardous waste by imposing strict liability against any "owner or operator" of a facility that releases such materials. This begs the question: How does one define "owner or operator" and how does one apply the strict liability statute to a trust?

Because an inherent and indispensable characteristic of a trust is the division of legal and equitable interests, CERCLA presents the daunting possibility that a trustee, holding nothing more than a bare title in a violator's property, may find himself subject to liability. Often, it is a liability that that far exceeds the trust assets.

The 1999 case Canandyne-Georgia v. Nationsbank, N.A. (South), 183 F.3d 1269 (11th Cir. 1999) illustrates this concern. In Canandyne, the plaintiff corporation acquired a hazardous waste-generating pesticide business which it promptly sold. Several years later, the Environmental Protection Agency ("EPA") ordered Canandyne to undertake major steps toward cleaning up the surrounding property. After expending considerable time and resources in this effort, Canandyne sued Nationsbank, claiming that it had served as trustee at the time the property released the hazardous substances.

The Eleventh Circuit Court of Appeals in Canandyne determined that whether or not a party, specifically a trustee, is an "owner" for the purposes of CERCLA is a matter to be determined by state law. It logically follows that a trustee's liability will hinge on the jurisdiction's treatment of trustees as "owners" of property. This is problematic because it creates uncertainty for trustees, particularly when they have properties in multiple jurisdictions, subjecting them to liability under varying standards. It is a valid concern for conservators and executors, as well, who serve much the same role as trustees.

The Canandyne decision provides a frustrating answer to our initial query. The fact of the matter is that there is no clear, resolved definition of the word "owner." The use of differing standards creates uncertainty that must be remedied either by legislative amendment or judicial agreement. Without this needed change, there is simply too much uncertainty for efficient management of trusts and other estate planning devises.

Protecting the Roads Not Traveled: The Continued Conflict Around the “Roadless Rule” of 2001

This post was written by Assistant Online Editor Zach Becker.

On August 3, 2009, the State of Colorado proposed a petition to send to the USDA as to the management of the national forest "roadless areas" within the State of Colorado. On that same day, began a 60 day public comment period as to the proposed petition, which has provided an opportunity for the general public to critique and/or praise the proposals by Colorado before the state forwards its roadless rule petition to the USDA for approval. As one can imagine, this 60 day period has been filed with emotional pleas from environmental groups and surprisingly sportsmen. Pleas that point out legitimate and critical flaws in the proposed plan's ability to effectively protect some of the majestic, and largely untouched natural forests of Colorado and the fish and wildlife that call these habitats home. One of the areas of highest concern is the Currant Creek area, located of the North Fork of the Gunnison River, which is of interest for its coal mining potential. This area of undisturbed and pristine aspen and oak forests is a key location for elk and mule deer rearing, migration and hunting and would be immensely impacted by an allowance of mining in this pristine and remote habitat, high in the Colorado Rockies.

The U.S. National Forest Service divides each of its "management area" into different units. Each unit is provided with a different "forest plan" in order to achieve desires objectives, goals and management prescriptions for that unit. "Activities proposed to occur within a management area must be consistent with the management-area prescriptions as well as with the prescriptions applicable to the entire forest unit." Cal. ex. rel. Lockyer v. USDA, 2009 U.S. App. LEXIS 19219 at *6 (9th Cir. 2009). One such national forest unit distinction is the "roadless area." The roadless areas are largely undeveloped areas of wilderness, generally without roads. Before the promulgation of the "Roadless Rule" in 2001, "most forest plans provided for the extraction uses, including logging, mining, oil and gas development, and construction of off-road vehicle routes, on at least some portion of what are classified as inventoried roadless areas." Id at *7-8. In 1999, President Clinton asked the National Forest Service to devise a rule that would provide permanent protection to roadless areas in the national forests. Within a week, the Forest Service had begun work on the "Roadless Rule" and the rule was promulgated on January 5, 2001, just prior to Clinton leaving office, and went into effect on May 12, 2001. This provided the requested protection to all of the nation's roadless areas, other than select areas in Alaska and Idaho. The "Roadless Rule" was met almost immediately with opposition, with several cases calling into question the validity of such a blank rule throughout the US with little concern for state economies and objectives.

In response to this opposition and now within the Bush era, the National Forest Service devised and announced in 2005, the "State Petition Rule", which was thought to replace the "Roadless Rule." The "State Petition Rule" provided that a state could petition the Forest Service to make state-specific considerations for projects and treatment schemes for the roadless areas within that state's borders.

On August 25, 2009, The Ninth Circuit Court of Appeals ruled that the "State Petition Rule", was promulgated incorrectly, having violated the statutory requirements for promulgation of both the National Environmental Policy Act and the Endangered Species Act. Cal. ex. rel. Lockyer v. USDA, 2009 U.S. App. LEXIS 19219 (9th Cir. 2009). The Court then reinstated the Clinton era "Roadless Rule", which provides greater protection to the wildlife and environment found within the roadless areas of the nation's federal forests, and permanently enjoined the "State Petition Rule".

The state petition that may be forwarded by Colorado depending on the public comment period's reaction, is a petition as would be compliant with the "State Petition Rule", which would not be possible under the "Roadless Rule." There have been U.S. District Court decisions that have come to the opposite conclusion of the Ninth Circuit as to the validity of the two rules in question, in fact actually permanently enjoining the "Roadless Rule" throughout the U.S. Wyoming v. United States Dep't of Agric., 570 F. Supp. 2d 1309 (D. Wyo. 2008). Nevertheless, the Ninth Circuit opinion followed in 2009. The situation in Colorado presents a fork in the road for both the State of Colorado and the USDA. If the state chooses to forward its petition for consideration as allowed by the "State Petition Rule", then the USDA will have to directly address the question that has provided a split within authorities throughout the U.S. Without such action by the USDA, the only way for the roadless areas to be totally protected is by express action of President Obama to uphold the 2001 national rule, asking for the USDA to reinstate the "Roadless Rule", so as to pursue the same direction and objective as Clinton had in mind when he first asked for the rule to be created in 1999. With such explicit action, the roadless areas of our nation's forests can once again be guaranteed permanent and effective protection, thus ensuring that these areas and the wildlife that are contained within them, may be present for future generation within this country.

KJEANRL Blog welcomes two new editors and a new posting schedule

In it's inaugural run the KJEANRL blog has hit the ground running! Every school day since the beginning of the fall semester we've either had an abstract or blog post on the blog, Monday through Friday . Needless to say this has taken a great amount of commitment from the KJEANRL staff and especially Production Editor Mark Rouse who has had to review every abstract and post. In an effort to lessen the burden of the Production Editor and increase the quality and time in which articles are posted the KJEANRL Editorial Board has decided to add two Assistant Editor positions from the second year class solely to work on the blog.

Zach Becker will be the Assistant Online Editor of Abstracts and Kim Coghill will be the Assistant Online Editor of Blog Postings. With the addition of two staff members committing their time to the blog we expect the blog to operate on a new schedule.

As soon as next week we hope to have a blog post three times a week, every Monday, Wednesday and Friday. In addition we hope to post an abstract of former Articles, Notes and Comments from our past print issues Monday through Friday. If you have any suggestions on our production schedule please let us know!

Thanks,
Mark Rouse
KJEANRL Production Editor

“Would the Commonwealth Benefit from a Tax on Marijuana?” gaining publicity across the Bluegrass

Today staff member Zach Greer's post "Would the Commonwealth Benefit from a Tax on Marijuana" is the subject of a poll on the Northern Kentucky Enquirer's website.

Check it out at: http://nky.cincinnati.com/article/AB/20091009/NEWS0103/310090034/Poll++Legalize+pot+in+Ky

Also, yesterday Zach's post was featured on Lu-Ann Farrar's Kentucky News Review.

Check it out at:

http://www.kentucky.com/latest_news/story/968865.html

Haven't read the post yet? Here it is: http://www.kjeanrl.com/2009/10/would-commonwealth-benefit-from-tax-on.html

Congrats Zach!

Industry horsemen’s groups have the power to prevent off-site betting at Horsetracks

This post was written by staff member Nick Kloiber.

Racetracks in Kentucky have been in the news due to their place in the recent legislative battle over slot machines. Some tracks have said that, because of the dire financial times, they might have to close without the added draw of slot machines on site. Other tracks have threatened to reduce purses in an effort to cut costs. Turfway Park is one such racetrack, and it seems their solution might actually hurt them more than they originally thought, quickening a rush to closure.

The racetrack has proposed a 5% cut in all purses for the upcoming year compared to 2008, a total cut of about $700,000. Gregory Hall & Jenny Reese, Turfway, Horsemen dispute purse cut, THE COURIER-JOURNAL, Aug. 26, 2009, available at http://www.courier-journal.com/apps/pbcs.dll/article?AID=2009908250345. Without an agreement with the horsemen's group, simulcast betting on Turfway's races at other tracks nationwide could be prevented by those state's horsemen's groups. Id. The law that gives these groups this power is called the Interstate Horseracing Act of 1978. Congress decided that the Federal Government needed to ensure interstate cooperation in the area of horserace simulcasting, "in order to further the horseracing and legal off-track betting industries in the United States." 15 U.S.C.S. § 3001 (LexisNexis 2009). That is a straightforward proclamation of Congress's intent and position on regulation in the industry. The way they decided to regulate, however, reveals many questions.

Racetracks must get, among other things, consent from the host racing association in order to accept off-site betting. 15 U.S.C.S. § 3004 (LexisNexis 2009). As "a condition precedent to such consent, said racing association . . . must have a written agreement with the horsemen's group, under which said racing association may give such consent, setting forth the terms and conditions relating thereto." Id. Why did Congress give such a power to industry groups? Is it a legislative form of a collective bargaining grant? State's horsemen's groups can effectively band together and say they won't accept simulcasting from a track unless a contract is in place between that racetrack and its horsemen's group. With such a group effort, these groups have the power to prevent tracks from changing purse payouts or other contract issues with their local group, for fear that the changes will be rejected and their simulcast business will also be blocked.

For a track in Turfway's predicament, their efforts to reduce costs to try and stay in business could very well cost them even more money due to no simulcast business, tightening what was already a precarious financial situation even more. Everyone is allowed to bargain for what they think they can get, but Congress giving these industry groups a one-handed bargaining chip doesn't help struggling racetracks trying to stay competitive and in business.

Would the Commonwealth Benefit from a Tax on Marijuana?

This post was written by staff member Zach Greer.

These bad economic times have forced many people to find additional sources of income. For some, growing marijuana has been a popular solution to their economic needs. In 2008, more than 1 million marijuana plants were confiscated in east Tennessee, Eastern Kentucky and West Virginia. Roger Alford, Marijuana farming rebounds in economic hard times, LEXINGTON HERALD-LEADER, Sep. 10, 2009, available at http://www.kentucky.com/news/state/story/929103.html.

In a recent statement, State Budget Director Mary Lassiter said: "The state finished fiscal year 2009 on June 30 with 2.7 percent less revenue than it received in 2008. Things are getting worse, not better." Ronnie Ellis, Kentucky budget picture 'getting worse, not better', RICHMOND REGISTER, Aug. 27, 2009, available at http://www.richmondregister.com/statenews/local_story_239210926.html. Moreover, it is predicted that Kentucky revenues will drop another 2.5 percent this year. Id. Furthermore, the Commonwealth's unemployment rate remained above 11 percent for August 2009. Ky. Unemployment rate steady at 11.1%, LEXINGTON HERALD-LEADER, Sept. 18, 2009, available at http://www.kentucky.com/101/story/939767.html.

An in-depth analysis of the advantages and disadvantages of legalizing marijuana is beyond the scope of this blog posting. Instead, this posting merely poses a question to its readers, instead of funding eradication efforts to destroy this recession-proof crop, could the Commonwealth and its residents benefit from the legalization of marijuana? Ed Shemelya, head of marijuana eradication for the Office of Drug Control Policy's Appalachian High Intensity Drug Trafficking Area, said: "I've never seen any decline in demand for marijuana in bad economic times. If anything, it's the opposite." Roger Alford, Marijuana farming rebounds in economic hard times, LEXINGTON HERALD-LEADER, Sep. 10, 2009, available at http://www.kentucky.com/news/state/story/929103.html. As one of the largest marijuana producing states in the country, the Commonwealth of Kentucky will continue to be a forum for this highly debated political topic.

According to officials at the Office of National Drug Policy's Appalachia High Intensity Drug Trafficking Area Program (HIDTA), Kentucky produces more marijuana than any other state except California, making it home to one of the nation's more intensive eradication efforts — a yearly game of harvest-time cat and mouse in national forests, abandoned farms, shady hollows, backyards and mountainsides.

Chris Kenning, Kentucky goes after 'Marijuana Belt' growers, LOUISVILLE COURIER-JOURNAL, Sep. 30, 2007, available at http://www.usatoday.com/news/nation/2007-09-30-kentucky_N.htm.

Empirical evidence suggests that there could be significant financial incentives to legalizing marijuana. Nitya Venkataraman, Marijuana Called Top U.S. Cash Crop, ABC NEWS, Dec. 18, 2006, available at http://abcnews.go.com/Business/Story?id=2735017&page=1. In 2005, a study by Jeffrey Miron (a visiting professor at Harvard) projected that if the "United States legalized marijuana, the country would save $7.7 billion in law enforcement costs and could generate as much as $6.2 billion annually if marijuana were taxed like alcohol and tobacco." Id.

However, others argue that such large financial gains are unlikely. Rosalie Pacula, a senior economist at the Rand Corp. and co-director of its drug policy research center, said:

First, you have to consider that legalizing it [marijuana] would have its own costs. Recent research . . . shows marijuana to be more addictive than was thought. Because marijuana is illegal, and because its users often smoke tobacco or use other drugs, teasing out marijuana's health effects and associated costs is almost impossible. And more people would smoke it regularly if it were legal -- Pacula estimates 60% to 70% of the population as opposed to 20% to 30% now -- and the social costs would rise. She takes issue with figures from Harvard's Jeffrey Miron, among others, who says that billions spent on enforcing marijuana laws could all be saved by legalization. Rand's research, Pacula says, finds that many marijuana arrests are collateral -- say, part of DUI checks or curfew arrests -- and many arrestees already have criminal records, meaning they might wind up behind bars for something else even if marijuana were legal.

Patt Morrison, Should we tax pot?, LOS ANGELES TIMES, Dec. 4, 2008, available at http://www.latimes.com/news/opinion/la-oe-morrison4-2008dec04,1,2468640.column. This excerpt shows that a tax on marijuana might not result in the economic windfall that many predict.

The fact remains that Kentucky is a major producer of marijuana, a crop that, if taxed, could result in large revenues for the Commonwealth. However, some people have doubts that a "tax revenue [from marijuana] would offset the full cost of regulating and enforcing the legal market." Id. Although economic incentives alone might not be enough to justify the legalization of marijuana, it remains a topic for discussion.

Emerald Ash Borer: A Threat to a Valuable Natural Resource

This post was written by staff member Jennifer Parker.

When thinking of natural resources today, issues surrounding coal and other fossil fuels are often the first things to come to mind. Despite so much emphasis on "green" living and protection of our environment, our most basic, yet perhaps most important, natural resource seems to go unnoticed – our trees. Even if the focus turns to trees and their protection, problems surrounding deforestation are those that typically arise. However, in Kentucky and other nearby states, a new problem is threatening our trees, and thus an invaluable natural resource. That threat is the Emerald Ash Borer ("EAB"), a beetle native to Asia.

The larvae of EAB, which "feed on the inner bark of ash trees," resulting in the trees' inability to "transport water and nutrients," are the source of the problem. Emerald Ash Borer, http://www.emeraldashborer.info (last visited Oct. 6, 2009). The problem in Kentucky appears to be in its early stages, with the first infestations having been confirmed just four months ago in May 2009. Emerald Ash Borer (EAB) FAQs for Kentuckians, http://www.ca.uky.edu/entomology/entfacts/ef453.asp (last visited Oct. 6, 2009). However, the impact in other states illustrates how severe these infestations can become and the significance of their presence in a state. For example, just in the area of southeastern Michigan, tens of millions of ash trees have been killed since discovery of EAB there in 2002. Emerald Ash Borer, http://www.emeraldashborer.info (last visited Oct. 6, 2009).

As might be expected, legal steps have been taken to protect our trees and prevent the spread of EAB and subsequent destruction it causes. A recent 2009 Industry Note explains that twenty counties in Kentucky have been placed under a state quarantine in hopes of halting the spread of infestation. B. Ammerman, et al., Forestry Emerald Ash Borer – Industry Note August 2009: Shipping Ash Lumber and Other Ash Products, http://pest.ca.uky.edu/EXT/EAB/EABsawmil.pdf (last visited Oct. 6, 2009). With quarantines in place in other states with an EAB problem, the Kentucky EAB quarantine appears to be an appropriate and necessary step. However, there are restrictions underlying this quarantine that should be noted by Kentuckians. Specifically, the Industry Note states, "Once a quarantine has been issued it becomes a state violation to move ash wood products out of the quarantine zone without entering into an EAB Compliance Agreement with the Kentucky State Entomologist's Office." Id.

With the beginning of autumn upon us and cold weather approaching, this quarantine and attached restrictions may impact Kentuckians purchasing, selling, and using firewood. Because there is little information made widely known without searching for it, it is important for Kentuckians (and residents of other states under EAB quarantine) to understand the legal restrictions on the movement of certain types of wood before finding themselves in violation of such. Even though not mentioned in the Industry Note, with a legal restriction, there is bound to be a penalty for its violation. Aside from the potential legal ramifications, those living in states under quarantine will hopefully recognize what a devastating impact the EAB infestation has had and will continue to have on one of our most valuable natural resources, and thus be provided with an incentive to abide by the restrictions in place and educate themselves as to the issues involved.

Ohio and Kentucky both debating the issue of racetrack gambling

This post was written by staff member Katie Huddleston.

The issue of allowing additional gambling at racetracks, usually in the form of slot machines, has been a hot topic in the equine industry since the recession that began last fall has lead to dramatic decreases in betting and earnings at such tracks. Janet Patton, Drop in wagering eats into Ky. Coffers, LEXINGTON HERALD LEADER, Sep. 22, 2009, available at http://www.kentucky.com/news/state/story/944936.html. Kentucky, home to the world's most renowned horse race, the Kentucky Derby, has yet to approve such racetrack gambling. Governor Steve Beshear called a special legislative session in June in an attempt to pass legislation that would allow slot machines to be added to the Kentucky racetracks: Churchill Downs (home of the Kentucky Derby), Keeneland Race Course and Turfway Park. However, the measure was unsuccessful. Now, neighboring Ohio is facing its own challenges in its attempt to institute video lottery terminals at equine racetracks.

Monday, September 21, 2009, the Ohio Supreme Court put a freeze on the implementation of slots at the state racetracks after Gov. Ted Strickland had "authorized the machines by executive order" and the legislature had included the expected revenue in its budget. Julie Carr Smyth, Ohio high court ruling puts racetrack slots on hold, LEXINGTON HERALD LEADER, Sep. 22, 2009, available at http://www.kentucky.com/101/story/944935.html. This measure was the result of a suit brought by the developers of LetOhioVote.org. The group sued the Ohio Secretary of State for ignoring submitted petitions asking for the issue of racetrack slots to be included on the ballot in November of 2010. While the state argued that the slots revenue was "shielded from the referendum process" by reason of being an appropriation, the court disagreed. Id. The court ordered Secretary of State Jennifer Brunner to accept the petitions submitted by LetOhioVote.org, which requires the Secretary to put the question of racetrack slots on the ballot next year. According to the court's ruling, until such vote is held, the slots plan cannot be implemented. The Ohio Lottery Commission, the Governor and legislators were disappointed with the result, which they claim will result in a "nearly $1 billion shortfall" in the state budget. Id.

The Supreme Court's decision could have wide-reaching implications on the issue of racetrack gambling across the country. In Kentucky, the decision may offer a reprieve. With betting at Kentucky racetracks falling as much as 17 percent last season, the added pressure of competing with Ohio tracks may be diminished by this delay in slot implementation. Janet Patton, Drop in wagering eats into Ky. Coffers, LEXINGTON HERALD LEADER, Sep. 22, 2009, available at http://www.kentucky.com/news/state/story/944936.html. The decision may also provide incentives for racetrack gambling opponents and proponents to consider seeking a referendum to finally decide the issue. In the meantime, Indiana tracks will fill the void temporarily left by Ohio and Kentucky by implementing racetrack slot gambling this year, monopolizing the market for such gambling in the region, at least for the time being. Id.

A Question of Ownership: Governmental Liability under CERCLA in U.S. v. Newmont USA Ltd.

Former staff member Charles Thomas wrote this comment appearing in JNREL Vol. 22 No. 2. This abstract was written by Addison Schreck.

In US v. Newmont the US District Court for the Eastern District of Washington created a circuit split on what criteria is required to determine ownership under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). "A Question of Ownership: Governmental Liability under CERCLA in US v. Newmont USA Ltd." follows the court as it navigates the tricky determination of ownership under CERCLA.

Citing precedent in the Ninth Circuit, the court recognizes that though the government's fee simple interest in the facility makes them it's possible owner, additional indicia of ownership to legal title must be present in order to assign ownership and its liabilities under CERCLA. In analyzing the ownership of the subject facility, an open-pit uranium mine located on the Spokane Native American Reservation in Washington, the court categorizes the property interests allotted by the Dawes Act as well as the Indian Mineral Leasing Act as further indicia of ownership. Also cited by the court as evidence of CERCLA ownership was the government's dominion over lease agreements regarding the property and decisions which it made with regard to them despite the dissent of the Spokane Indian government. Congress' continued ability to extinguish the Indian title to the property also weighed heavily in the court's decision that the United States qualified for ownership under CERCLA and would therefore be liable for the damages.

The court made a similar decision with regard to a second parcel of land, with a more complex chain of custody, including a somewhat incomplete transfer to a private citizen by the name of Edward Boyd. While the fee simple to the land lies with Boyd's descendants the court stipulates that there are circumstances, as here, where a party aside from the fee simple owner may be considered the "owner" within the bounds of CERCLA.

US v. Newmont joins numerous other decisions assigning liability for environmental damages to the United States, these decisions are indicative of the waiver of sovereign immunity contained in CERCLA. The United States is currently the largest property owner in the country and the liability stemming from environmental incidents promises to be an important factor in their future land use decisions.