News: Chicago Lawyer Quotes Environmental Practice Chair Steve Armstrong

The August issue of Chicago Lawyer quotes Ungaretti & Harris Environmental Practice Chair Steven H. Armstrong in the article, "The changing environmental law practice."  Steve discusses his work with brownfields and contaminated property issues.

To read the article, please see below or click the Related Files link.

The changing environmental law practice

July 31, 2009

By Olivia Clarke

In high school, James Brusslan’s French teacher asked him what he wanted to be when he grew up.

He didn’t know how to say in French that he wanted to become an environmental law lawyer — but that was his goal.

“There weren’t a lot of environmental lawyers that existed at that time,” said Brusslan, now head of the environmental law service group at Levenfeld Pearlstein. “But from early on I felt as though my biggest social priority was preserving the environment.”

“My father is a lawyer and when I told him I wanted to be an environmental lawyer he said, ‘I don’t think that type of law exists.’ It didn’t matter. For me, my interest was to help the environment.”

Before “going green” was the popular thing to do, many lawyers, like Brusslan, made the choice to pursue environmental law as a career path. Maybe working on an interesting landfill or water case influenced their decision, or maybe they chose to do this because of a personal quest. Regardless, they made the decision to practice in a very specialized area — a practice that has ebbed and flowed in terms of the type and amount of work available.

With a new president in office, local environmental lawyers predict more discussion involving the environment. While Superfund cases provided a lot of work in the ’80s and ’90s for lawyers, many people anticipate a resurgence of the practice in the coming years with a slew of new environmental law issues involving such areas as climate change.

These new issues will not only affect the environmental law practice, but also other practices where clients will look to their lawyers for guidance on meeting compliance requirements and starting green initiatives.

A sea change

Many lawyers say the environmental practice has evolved over the years — with some years providing a great deal of work.

Between about 1986 and 2000, Superfund matters monopolized environmental lawyers’ time, Brusslan said.

Superfund is the name given to the environmental program that addresses abandoned hazardous waste sites. It’s also the fund established by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).

Many companies faced potential liability because of their waste sites, so they hired outside lawyers to educate, defend, and guide them, he said. Today many companies handle these issues in-house.

Brusslan said another way he became actively involved in environmental issues starting in the ’80s was by representing citizen groups fighting for companies to uphold environmental and zoning laws.

He played a role in cases involving radioactive thorium in West Chicago and groundwater contamination in DuPage County. He continues to represent developers and homeowners in matters involving Illinois lakes and the Chicago River.

The amount of environmental work has decreased since early 2002 or 2003, he said. Many law firms want their real estate or transactional lawyers to also handle environmental matters, so fewer pure environmental lawyers are needed today, Brusslan said.

“Levenfeld does a lot of real estate and corporate work and I counsel their clients on [environmental] issues that come up,” he said. “For instance, at 10:30, I’m going to talk to a potential buyer of property that is very contaminated. The question is, ‘Do we want to buy it, and what are the potential risks involved?’ There is substantial transactional work where environmental issues come up.”

Sidley Austin’s Rob Olian, head of the Chicago office’s environmental practice group and co-head of the firm’s national environmental practice, said he likes how the environmental practice mutates over time.

When he started practicing law in 1977 at Sidley Austin, there was one environmental lawyer. Olian worked on the governmental side of matters, but environmental issues often overlapped.

The first environmental matter he assisted on involved getting a sanitary district ordinance changed for a client, and because he liked the project, he asked for more environmental work. He soon became involved in hazardous waste regulations, which was a new area for all lawyers at that time.

There was a dramatic increase in the need for environmental lawyers in the ’80s due to Superfund, Olian said.

But not only companies facing regulations required environmental lawyers. Banks lending, for example, to buy real estate or fund a leveraged buyout needed to do due diligence, he said.

At the peak of Superfund, the environmental practice was one-third transactional, one-third regulatory, and one-third litigation, Olian said. The environmental group was 10 percent of the whole firm at the peak of Superfund.

“What happened is, as clients got more comfortable with it, and realized it wasn’t the horrific thing some people were painting it to be, they did a little less due diligence,” he said. “For the first time there was an in-house environmental person. We had a number of our associates get hired away to clients. The same person is doing the work, but they are just doing it in-house.”

Today his practice is 70 to 80 percent litigation or contested matters as opposed to regulatory work and lobbying, he said.

“Both personally and within the firm, our practice is really the busiest it’s been in several years,” Olian said. “It’s less about anything that the new administration has done. It’s just a bunch of cases bubbling along, and a couple of them have gone to trial in the last couple months, and they are all getting hot and heavy at the same time.”

Today’s practice

Susan Franzetti, one of the founders of Nijman Franzetti — which specializes in environmental law, said the environmental practice has become more sophisticated over the past 20 years.

That sophistication means environmental lawyers today need to have the depth and expertise to handle the types of issues that clients now expect, Franzetti said.

The regulatory questions environmental lawyers face today from clients, she said, “tend to be in those gray areas or more novel areas. Hence, my feeling is that the practice has certainly matured.”

At the same time, there are fewer lawyers practicing in this area than there were 10 years ago, Franzetti said.

All environmental lawyers tend to have areas of expertise but do not necessarily specialize in the same types of environmental matters these days, she said.

Franzetti focuses on matters under the Clean Water Act, CERCLA, and the Resource Conservation and Recovery Act (RCRA).

For example, she represents a power generation company in Clean Water Act rulemaking proceedings before the Illinois Pollution Control Board concerning the Chicago Sanitary and Ship Canal, and the Lower Des Plaines River. It involves potential new use designations and water quality standards for those waterways under the Clean Water Act.

The Illinois Pollution Control Board will need to determine issues involving what are the attainable uses of the waterways, and the Illinois EPA has proposed would-be new use classifications for segments of those waters, she said.

“It involves challenging issues on both the scientific side and the legal side,” she said. “That’s one example of something that prior to a few years ago was not something I had addressed. … I think I got involved in 2002, and then the proposed rules were filed in late 2007.”

Stephen Armstrong, chair of the environmental practice group at Ungaretti & Harris, deals with contaminated property issues.

He works with brownfields, which are real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Armstrong said he gets involved in the cleanup of these sites, and litigation related to them.

In 1995, Congress failed to reauthorize the Superfund tax and Superfund ran out of money by 2003, he said.

This resulted in an increased reliance by the EPA on appropriations by Congress, and a slowdown of U.S. EPA activity on sites where no potentially responsible parties are present, Armstrong said.

Around the same time, states developed cleanup programs that are alternatives to Superfund. Those state programs have encouraged cleanup and redevelopment by making cleanup, in many cases, less expensive, he said.

In 2002, Congress adopted brownfield legislation that provided certain liability protection for parties purchasing contaminated sites. This legislation, as well as the emergence of these state cleanup programs, spurred greater activity in the private sector related to the purchasing and cleanup of these sites, he said.

“Brownfields are a subset of real estate, and real estate has been hard-hit by the recent recession,” Armstrong said. “As we work our way through the recession, and I think as credit becomes available in the real estate market, we are going to see a resurgence of brownfield activity. Right now a lot of activity is based on the availability of government funding.”

Andrew Running, a partner at Kirkland & Ellis, describes himself as a litigator who handles many environmental law cases.

In the ’90s he, along with many other lawyers, handled environmental insurance matters, he said.

For example, he helped represent Amoco in its lawsuit against the Lloyd’s of London involving liabilities at all its refineries. The Amoco case lasted about five years. Lawyers worked heavily on environmental insurance matters for about a decade, he said.

Running today handles the occasional enforcement case, but he said those cases tend to be episodic.

When they arise the goal is to resolve them without litigation, he said.

“The regulatory authorities have so much leverage that the amount of the penalties are very high if they prevail,” he said. “The practice is to resolve any dispute with the enforcement authority and move on. Every company needs a good relationship [with the enforcement agency]. And no company can afford to litigate everything to the last letter.”

Most of his environmental-based cases today tend to be more in the private toxic tort area. For example, he worked on a case in Indiana that he settled about a year ago that involved a class action brought by residents in 65 homes. The contamination was historical, but it became the subject of regulatory scrutiny after its client purchased the station, he said.

“I enjoy that every [environmental] case presents a different challenge, and I particularly enjoy working with scientific experts in the numerous disciplines that the cases require,” Running said.

The next frontier

Tom Skinner, firmwide co-leader of Mayer Brown’s environmental practice, anticipates that under President Obama’s watch the EPA will become more aggressive.

Clients will have additional environmental needs, which will keep environmental lawyers increasingly busy, he said.

“Climate change is clearly an issue that is at the forefront of everyone’s mind because of the activity in Congress and because of the commitment the administration has made to at least start looking into a solution,” he said. “There has been attention paid globally by other countries, yet I think there is a fair amount of uncertainty in terms of the legal practice and where climate change is going to go and what opportunities it has for practicing lawyers.

“I think there is an increasing amount of attention to the Clean Water Act. … Water issues are going to come to the floor, and not just involving the Great Lakes, but the Chesapeake and the coasts of both sides of the country.”

From a litigation standpoint, Skinner said there has recently been more toxic tort or mass tort cases — a trend he doesn’t see changing.

He’s also seen the start of an uptick in enforcement-related matters. While companies continue to keep routine environmental work in-house, they look to outside lawyers for larger and more complex matters, or when specialized expertise is needed, such as prior experience as a regulator.

“I think that there are some companies delaying work for as long as they can because of the expense involved,” he said. “I think the combination of the new administration and hopefully the economic recovery, this will be a period when environmental work will flow.

“Clean Air Act matters continue to be of both great importance to regulated entities and also a steady source of work for our practice,” Skinner said. “Tracking climate change developments as the proposed legislation works its way through Congress, while not creating a large amount of paying work at this point, still requires some attention. [Clients] want us to track what’s going on and keep them apprised of new developments — even those who are not directly participating in the legislative process.”

Franzetti, from Nijman Franzetti, said it’s too early to know the impact the Obama administration will have on environmental law.

Back in the ’90s, everyone assumed the Clinton administration would dramatically change the world of environmental law with the potential passage of tougher laws and regulations, but that didn’t happen, she said.

She advises young lawyers interested in environmental law to practice in the area of real estate, land use, or zoning and make environmental law a part of any of those practices because there is greater demand for lawyers with interdisciplinary skills.

Brusslan, from Levenfeld Pearlstein, anticipates that potential greenhouse gas, climate change, and global warming legislation will increase the legal work not only for environmental lawyers, but also lawyers in other areas whose clients will want guidance. These clients will need lawyers who will understand any new environmental legislation.

The practice of cap-and-trade will increase. Companies that cannot meet their greenhouse gas requirements will go into the marketplace and buy greenhouse gas credits from companies that over-achieved on the requirements, or they will sell credits if they have already achieved requirements, Brusslan said.

There will also be an increasing need for real estate lawyers who understand green leases, and how to help building owners construct and operate energy-efficient and green buildings, he said.

Brusslan is certified as an accredited professional who understands the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. Developed by the U.S. Green Building Council, it sets standards for environmentally sustainable buildings.

“I definitely have some of Levenfeld’s clients calling me saying, ‘We want to have a LEED building’ or they might own a building and the tenant wants certain things and they want to know if it is consistent with LEED,” he said.

A couple months ago, the EPA made a finding that greenhouse gases, such as carbon dioxide and methane, are pollutants that may be endangering people’s health and welfare under the Clean Air Act. Some lawyers believe this will mean more toxic tort cases, he said.

“Historically what courts have done, for the most part, is said, ‘We’re not going to rule on these issues because it’s a political question. It is something the executive branch or Congress needs to determine,” Brusslan said. “Now that the EPA termed it an endangerment, there is an argument that the courts should issue opinions.”

Olian, from Sidley Austin, said during the last eight years there was a fall-off in environmental enforcement because, in part, after 9/11 many enforcement officials moved over to homeland security issues.

It will take several years for the “enforcement initiative ship” to head in a new direction, he said.

For a long time climate change was generally dealt with at the treaty level, with the government trying to work out policy and determine what the science is, he said.

“For your normal, everyday large company it was something they didn’t feel they could influence and they weren’t sure how it was going to affect them,” Olian said.

“All of a sudden they were awakened to the fact that they may be in a position to make a lot of money if they were selling allowances or may have to spend a lot of money if they are in a position where they have to buy them,” he said. “… I think people really sense a lot of pressure on public companies to disclose in their securities filings what their impact on global warming and climate change could be.”

He anticipates that climate change and the interplay with energy will make the practice very exciting over the next 30 years. It will also call for more lawyers with energy expertise.

“If I were a young lawyer interested in environmental law, I would be salivating because climate change is finally hitting the radar screen of lawyers and clients,” Olian said.

Olian said more newer lawyers will show increased interest in environmental law.

“We had our meeting with summer associates a couple weeks ago and there was a palpable interest in environmental law that wasn’t there four or five years ago,” he said. “This climate change stuff is a dream to them both because there is nobody who has a ton of expertise yet, and you can get in on the ground floor and really develop a niche.

“They see the ability to make a difference, but they also see, ‘Oh my gosh, this is going to be a business opportunity.’”

New initiatives

James Greenberger, co-head of the cleantech practice team in Reed Smith’s business and finance group, first became interested in cleantech in 2001.

A corporate lawyer by training, when his phone stopped ringing as much at it used to he said he looked into other areas on the cusp of booming.

Greenberger co-founded the National Alliance for Advanced Transportation Batteries (NAATBatt), which has members from Silicon Valley start-ups to major tech and energy companies. NAATBatt was instrumental in encouraging the administration to allocate $2 billion in the American Recovery and Reinvestment Act of 2009 to advance battery manufacturing, he said.

NATTBatt’s goal is to build an advanced manufacturing facility that can be shared by multiple U.S.-controlled companies to produce lithium-ion cells for use in transportation and military applications. Increased use of battery power in such applications could significantly reduce U.S. dependence on imported petroleum and reduce greenhouse gas emissions, he said.

A facility will be built in Kentucky if it receives the go-ahead from the Department of Energy, he said.

NAATBatt expects to lead an effort by the U.S. battery industry to catch up with and surpass the foreign companies that dominate lithium-ion technology, he said.

Today, U.S. companies produce less than 1 percent of all lithium-ion battery cells, even though these cells are expected to power the cars and trucks of the future, Greenberger said.

“I love the practice of law. I’ve done it all my life,” he said. “One thing that has always bothered me about being a lawyer is sitting around and waiting for the telephone to ring. [This project] has given me an opportunity to exercise my proactive tendencies by going out and organizing the clients and promoting a client where the client didn’t previously exist.”

New teams pop up at law firms as new environmental initiatives enter the discussion.

For example, Katten Muchin Rosenman created the interdisciplinary Sustainability and Climate Change Practice, which launched in February. Lawyers from such practices as real estate, environment, and corporate participate in the practice.

Nancy J. Rich, chair of the practice, said a practice like this is needed because it’s inevitable that a whole new spectrum of regulations creating sustainability initiatives and laws will occur.

“I think that rather than seeing a slice of the issues and opportunities that are facing [clients] we, in a group like this, will be able to analyze the environmental, tax, potential greenwashing, green building, and myriad of other issue that potentially affect their businesses,” Rich said.

“When clients have a comprehensive picture, it makes it much easier to make better business decisions about how they want to move forward in terms of development and marketing.”

Environmental policy is a much bigger consideration today for companies, she said. They look at it from both an environmental and business perspective.

“The government’s new policies involving sustainability are going to cut across a number of different practices,” she said. “I think when I first became involved in environmental law in the mid-’80s it was very much government lawyers bringing lawsuits against companies that hired lawyers from outside law firms. It was a much more adversarial command-and-control atmosphere.

“Environmental policy is a much bigger consideration in the companies we represent that are deciding how to best comply with regulations.” 

Reprinted with permission from Chicago Lawyer.