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Mississippi Environmental Quality Permit Board

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Summary of Meeting Held May 12, 2020

The Mississippi Environmental Quality Permit Board (“Board”) convened at 9:00 a.m. on May 12, 2020.  This meeting was held through a telephone and Zoom conference call and the public was invited to listen to the deliberations of the Board.  The Board first approved minutes from the previous meeting held on April 14, 2020 and the non-controversial actions/ certifications completed by the staff since the March meeting. Then, following a prepared agenda, the Board considered items as follows:

OFFICE OF GEOLOGY

Ron Porter (MDEQ Office of Geology, Mining and Reclamation) presented the MDEQ Staff’s recommendations and Board approved the following:

Surface Mining Application

Permittee County Permit
Baker Ready Mix & Construction, LLC Winston A2038

James Matheney (MDEQ Office of Geology, Mining and Reclamation) presented the MDEQ staff’s recommendations and Board approved the following:

Surface Mining Bond Releases

Permittee County Permit Staff Recommendation
J. J FERGUNSON SAND & GRAVEL CARROLL P98-027 No Release
JOE MCGEE CONSTRUCTION CO RANKIN P14-021 Final 10%
JOE MCGEE CONSTRUCTION CO RANKIN P15-001 Final 10%
MAGCO, INC JASPER P13-007 No Release
ODDEE SMITH CONSTRIUCTION, INC LINCOLN P02-066AAA Initial 35%
W.S. JORDAN & SONS SAND & GRAVEL, INC DESOTO P87-005 Initial 90%
W.S. JORDAN & SONS SAND & GRAVEL, INC DESOTO P92-001 Final 60%
W.S. JORDAN & SONS SAND & GRAVEL, INC DESOTO P96-026 Final 20%
W.S. JORDAN & SONS SAND & GRAVEL, INC DESOTO P99-045 Initial 90%
ALL SOUTH CONSTRUCTION NESHOBA P99-071A Final 80%

OFFICE OF POLLUTION CONTROL

WASTE DIVISION – SOLID WASTE PERMITTING BRANCH

 Quad County Environmental Solutions, LLC (Quad County Landfill), Marshall County, Modification of Solid Waste Mgmt. Permit SW0470010580

 MDEQ staff presented to the Board and recommended approval the above-referenced Application.  Staff described the Quad County Landfill projects and discussed the dates of various public notices and hearings, reporting that the no public comments were received at the hearing.  After answering some brief questions from the Board, MDEQ staff recommended issuance of the Permit and the Board approved.

Other Business

Roy Furrh, MDEQ Legal Counsel, informed the Board members that the evidentiary hearing regarding Mississippi State Port Authority – North Port Property in Harrison County, scheduled for May 12, 2020, has been postponed and will be rescheduled.

Mr. Furrh also reminded the Permit Board officer elections will be held during the June meeting.

The next Permit Board meeting will be held on June 9, 2020, at 9 a.m.

This Newsletter is a publication of the Environmental Practice Group of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

If you have any questions concerning the content of a newsletter, or if you would like further information about the matters addressed in a newsletter, please contact John Milner, the Brunini Firm Environmental Practice Group leader, at jmilner@brunini.com or (601) 960-6842.

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Mississippi Extends Tax Filing and Payment Deadlines to July 15, 2020

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In Notice 80-20-002, May 5, 2020, the Mississippi Department of Revenue has advised that the due date for filing income tax returns and making first and second quarter estimated payments is extended t July 15, 2020, consistent with the Federal Covid extension.  The notice applies to individual and fiduciary income tax returns and corporate income and franchise tax returns.

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Mississippi Commission on Environmental Quality

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Summary of Meeting Held April 23, 2020

The Mississippi Commission on Environmental Quality (“MCEQ”) convened at 9:00 a.m. on April 23, 2020.  This meeting was held through a telephone conference call.  The public was invited to listen to the deliberations of the Commission on the conference phone line.  The Commission first approved minutes from the previous meeting held on February 27. 2020. Then, following a prepared agenda, the Commission considered items as follows:

FY 2021 Underground Storage Tank Fee Recommendation

A public comment period concerning the FY2021 Underground Storage Tank (UST) Fee was held between February 12 through March 12, 2020 with the public notice information distributed to the Mississippi Petroleum Marketers and Convenience Store Association. No comments were received. Staff recommended and the Commission approved to set the fee at the proposed rate of $150.00 per UST, which is an increase of $50 from last year’s tank fee. The tank fee has been set at $100 per UST since 1998.

Environmental Covenant for Southland Oil Yazoo Bulk Plant

Pursuant to the Commission’s delegation regulations (11 Miss. Admin. Code Pt. 1, R.1.1.Y.), the Interim Executive Director of MDEQ approved the Environmental Covenants between the Commission and Comet Street, LLC regarding the remediation of a former bulk plant located at 1184 Rialto Road in Yazoo City, Mississippi. The site operated as a bulk storage plant for diesel fuel and gasoline. Site assessments have revealed release(s) of diesel fuel and gasoline contaminating soils and groundwater at concentrations in excess of Target Remediation Goals. Remedial actions included the installation of a dual phase extraction system in 2006 and soil excavation in 2013. The staff of the MDEQ has evaluated the proposed Environmental Covenant and believes that, with the conditions and restrictions contained within; the site will be in compliance with applicable State laws and standards and will be protective of the public health and the environment. This agenda item is for reporting purposes only.

The next Commission meeting will be held on May 28, 2020, at 9 a.m.

This Newsletter is a publication of the Environmental Practice Group of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

If you have any questions concerning the content of a newsletter, or if you would like further information about the matters addressed in a newsletter, please contact John Milner, the Brunini Firm Environmental Practice Group leader, at jmilner@brunini.com or (601) 960-6842

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Mississippi Environmental Quality Permit Board

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Summary of Meeting Held April 14, 2020

The Mississippi Environmental Quality Permit Board (“Board”) convened at 9:00 a.m. on April 14, 2020.  This meeting was held through a telephone conference call.  The public was invited to listen to the deliberations of the Board on the conference phone line.  The Board first approved minutes from the previous meeting held on March 10, 2020 and the non-controversial actions/ certifications completed by the staff since the March meeting. Then, following a prepared agenda, the Board considered items as follows:

OFFICE OF GEOLOGY

James Matheney (MDEQ Office of Geology, Mining and Reclamation) presented the MDEQ Staff’s recommendations and Board approved the following:

Surface Mining Bond Releases

Permittee County Permit Staff Recommendation
Eutaw Construction Company Panola P16-016 Additional 15%
Eutaw Construction Company Oktibbeha P16-004 Final 50%
James Construction Group Hinds P14-005A No Release
Joe McGee Construction Co. Tallahatchie P16-029A Initial 70%
Wet Mine Assets Holding, LLC Hancock P04-008AT Initial 50%

Other Business

Roy Furrh, MDEQ Legal Counsel, informed the Board Members that the evidentiary hearing regarding Mississippi State Port Authority – North Port Property in Harrison County, scheduled for May 12, 2020, has been postponed and will be rescheduled. Steve Ray will be the hearing officer.

Mr. Furrh also reminded the Permit Board members that they need to complete their annual compliance forms and statement of economic interest forms and turn in their Designee Letters.

Mr. Furrh also discussed the upcoming May 12, 2020 Board meeting and stated that there are agenda items for which they expect persons to oppose Permit Board approval for these items.  Mr. Furrh stated that holding the meeting via Zoom or WebEx is being considered in order to allow all interested persons to address the Board in an easier manner. MDEQ will announce the meeting format at a later date.

The next Permit Board meeting will be held on May 12, 2020, at 9 a.m.

This Newsletter is a publication of the Environmental Practice Group of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

If you have any questions concerning the content of a newsletter, or if you would like further information about the matters addressed in a newsletter, please contact John Milner, the Brunini Firm Environmental Practice Group leader, at jmilner@brunini.com or (601) 960-6842.

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CHAMBERS USA RECOGNIZES BRUNINI AMONG TOP LAW FIRMS IN MISSISSIPPI

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The 2020 edition of Chambers USA, which lists leading law firms and individual lawyers in an extensive range of practice areas, jointly awarded high rankings to nine Brunini attorneys and six of the firm’s practice areas.

Chambers USA ranked six of Brunini’s practices, with the firm’s Energy & Natural Resources practice receiving the highest ranking possible in the state. The firm’s Construction, Commercial Litigation, and Environmental practices were also highly ranked.

Each year, Chambers USA conducts thousands of interviews and surveys with lawyers and their clients, as well as analyzes its own database resources, to determine rankings for top law firms and individual attorneys. The qualities on which rankings are assessed include technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment and other qualities valued by clients. Chambers USA ranks the top lawyers and law firms across all the United States of America.

A collective list of the nine Brunini attorneys recognized as among the best in their fields in Mississippi by Chambers USA include:

Construction:

Sam Kelly

Ron Yarbrough

Corporate/Commercial:

Walter Weems

Energy & Natural Resources:

James Halford

Watts Ueltschey

Gene Wasson

Environment:

John Milner

Gene Wasson

Litigation: General Commercial:

David Kaufman

Real Estate:

David Andress

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EPA Issues Unprecedented Civil Enforcement Relaxation Policy Due to COVID-19

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On March 26, 2020, U.S. EPA (EPA) announced a sweeping policy for relaxation of EPA enforcement of environmental non-compliance resulting from the COVID-19 pandemic (“COVID Enforcement Policy” or “Policy”).  The Policy applies retroactively beginning on March 13, 2020.  The expansive scope of the Policy’s enforcement relaxation discretion is widely perceived as being unprecedented in EPA history.  The full text of the EPA Policy memorandum is available at: https://www.epa.gov/sites/production/files/202003/documents/oecamemooncovid19implications.pdf.

Policy “General Conditions”

If compliance is not “reasonably practicable” due to COVID-19, facilities with environmental compliance obligations should satisfy the following Policy “general conditions” in order for EPA to exercise its enforcement relaxation discretion (“General Conditions”):

  • Minimize the effects and duration of any non-compliance caused by COVID-19;
  • Identify the specific nature and dates of the non-compliance;
  • Identify how COVID-19 was the cause of the non-compliance and the decisions and actions taken in response, including “best efforts” to comply and steps taken to come into compliance at the earliest opportunity;
  • Return to compliance as soon as possible; and
  • Document the information, action, or condition specified in (1) – (4) above.

EPA expects to focus largely on situations that “may create an acute risk or imminent threat to public health or the environment”.   All ongoing enforcement matters will continue.

Primary compliance categories to which the Policy is applicable

The COVID Enforcement Policy addresses the following major compliance categories that are generally relevant to Mississippi facilities: (1) routine compliance monitoring and reporting, (2) facility operations and (3) critical infrastructure.

The Policy also addresses (1) public water systems regulated under the Safe Drinking Water System, (2) EPA settlement agreement and consent decree reporting obligation and milestones and (3) programs that EPA implements directly rather than by MDEQ.  Those portions of the Policy are not addressed in this article since they are not generally applicable to Mississippi facilities.

I. Routine compliance monitoring and reporting

EPA has determined that the COVID-19 pandemic may constrain the ability of facilities to perform the following environmental obligations:

  1. Routine compliance monitoring – including CEMS and stack tests, relative accuracy test audits, LDAR monitoring, fence line monitoring, RICE readings and monitoring, tank and piping inspections, assessments, or stormwater inspections;
  2. Integrity testing – including tank integrity testing (e.g., API 653) for compliance with certain “good air pollution control practices”;
  3. Sampling – including effluent sampling and testing, as well as cooling tower sampling;
  4. Laboratory analysis – including laboratory holding times and turn-around times;
  5. Training – including SPCC training, hazardous waste trainings, CAA section 129 renewals, and other annual re-certifications; and
  6. Reporting and certification – including reports and certifications associated with delayed activities described above, and late reports under permits or other regulatory obligations, including TRI and greenhouse gas inventory reporting.

If reporting is not “reasonably practicable” due to COVID-19, Mississippi facilities should maintain this information internally and make it available to MDEQ upon request. In general, EPA does not expect to seek penalties for violations of these obligations in situations where (1) EPA agrees that COVID-19 was the cause of the non-compliance and (2) the facility provides supporting documentation to EPA upon request.  After the Policy is no longer in effect, EPA does not plan to ask facilities to “catch-up” with missed monitoring or reporting if the underlying requirement applies to intervals of less than three months.

II. Facility operations

With regard to COVID-19 impacts on facility operations, the Policy includes the following key provisions:

  1. Facilities should contact MDEQ if facility operations impacted by the COVID-19 pandemic may create an acute risk or an imminent threat to human health or the environment. In Mississippi, EPA’s first step after this contact will be to consult with MDEQ to discuss measures to minimize or prevent the acute or imminent threat to health or the environment from the COVID-19-caused non-compliance.
  2. If a facility suffers from failure of air emission control or wastewater or waste treatment systems or other facility equipment that may result in exceedances of enforceable limitations on air emissions, water discharges, land disposal, or other unauthorized releases, the facility should notify MDEQ as quickly as possible. The notification also should include (1) information on the pollutants emitted, discharged, discarded, or released; (2) the comparison between the expected emissions or discharges, disposal, or release and any applicable limitation(s); and (3) the expected duration and timing of the exceedance(s) or releases. EPA will consult with MDEQ to determine the appropriate response.
  3. If a facility is a generator of hazardous waste and, due to disruptions caused by the COVID-19 pandemic, is unable to transfer the waste off-site within the time periods required under RCRA to maintain its generator status, the facility should continue to properly label and store such waste and comply with the Policy’s General Conditions (see above). If these steps are met, EPA will treat these facilities as “hazardous waste generators”, and not “treatment, storage and disposal” (TSD) facilities. In addition, EPA will treat “Very Small Quantity Generators” and “Small Quantity Generators” as retaining that status, even if the amount of hazardous waste stored on site exceeds a regulatory volume threshold due to the facility’s inability to arrange for shipping of hazardous waste off of the facility site due to the COVID-19 pandemic.
  4. If a facility is an animal feeding operation, and, due to disruptions caused by the COVID-19 pandemic, is unable to transfer animals off-site and, solely as a result of the pandemic, meets the regulatory definition of concentrated animal feeding operation (CAFO), EPA will not treat these animal feeding operations as CAFOs (and will also not treat small CAFOs as medium CAFOs or medium CAFOs as large CAFOs).

III. Critical infrastructure

In situations where a facility is an “essential critical infrastructure”, EPA may consider a more “tailored” short-term “No Action Assurance” if EPA determines that is in the public interest. Such determinations are made on a case-by-case basis by EPA’s Office of Enforcement and Compliance (OECA) Assistant Administrator – Susan Bodine (who issued the Policy memorandum).  EPA will consider “essential” the facilities that employ “essential critical infrastructure workers” as determined by guidance issued by the Cybersecurity and Infrastructure Security Agency.

Exclusions from the Policy

The Policy does not provide EPA compliance enforcement discretion regarding:

  • Accidental releases;
  • Criminal violations;
  • Superfund and RCRA corrective action; and
  • Imports

Policy modifications/updates and termination

EPA will assess and update the Policy as needed and post a notification at https://www.epa.gov/enforcement/enforcement-policy-guidance-publications at least seven days prior to terminating the Policy.

If you have any questions concerning the COVID Enforcement Policy or related issues, please feel free to contact John Milner at jmilner@brunini.com or at (601) 960-6842.

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Mississippi Commission on Environmental Quality

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Summary of Meeting Held February 27, 2020

The Mississippi Commission on Environmental Quality (“MCEQ”) convened at 9:00 a.m., on February 27, 2020, at the offices of the Mississippi Department of Environmental Quality in Jackson.  The Commission approved minutes from the previous meeting held on November 15, 2019.  Chairman, John Dane, III welcomed Chris Wells as Interim Executive Director of the Mississippi Department of Environmental Quality (“MDEQ”).  Following a prepared agenda, items considered were as follows:

FY 2021 Title V Fee Recommendation – Approval to Proceed to Public Notice of Hearing

MDEQ Staff discussed the draft report containing the Title V Advisory Council’s Title V fee recommendation for the upcoming fee year has been forwarded to the Commission. Staff requested approval to hold a public hearing to receive comments regarding the proposed fee and to proceed with public notice of the hearing. After the public participation process is completed, staff will bring the fee recommendation back before the Commission for final action. This agenda item was presented for informational purposes only.

Commission Approval of Brownfield Agreement Termination

MDEQ Staff reported that the Commission approved Brownfield Agreement 6957-19 in June 2019 between the Commission and the Military Lee, LLC for remediation of the former Lee Middle School property located in Columbus, Mississippi. The original brownfield agreement required lead paint and asbestos abatement. The completed remedial activities have met the requirements of the MDEQ-approved Corrective Action Plan dated April 2019. Military Lee, LLC has requested the Commission to make a determination as to the completion of the Brownfield Agreement. The staff recommends the completion of the Brownfield Agreement. The staff of the MCEQ has evaluated the Brownfield Agreement completion and believes that the Site is in compliance with applicable State and Federal laws and standards and will be protective of the public health and the environment. The Commission approved this termination.

Environmental Covenant for YRC Freight Facility

Pursuant to the Commission’s delegation regulations (11 Miss. Admin. Code Pt. 1, R.1.1.Y.), the Executive Director of MDEQ approved the Environmental Covenants between the Commission and YRC Inc. regarding the remediation of property located at 102 Carrier Boulevard in Richland, Mississippi. YRC is an active trucking terminal and vehicle maintenance facility. The groundwater monitoring and recovery wells have been plugged and decommissioned. The staff of the MDEQ has evaluated the proposed Environmental Covenant and believes that, with the conditions and restrictions contained within; the site will be in compliance with applicable State laws and standards and will be protective of the public health and the environment. This agenda item is for reporting purposes only.

Commission Briefing on Underground Storage Tank Regulatory Fee

Pursuant to Miss. Code Ann. Sec. 49-17-421 revised July 1, 2018, the Commission is charged by law to establish the tank regulatory fee in an amount sufficient to cover the cost of the UST Program. The owners of each underground storage tank available for use in Mississippi is required to pay MDEQ the annual tank regulatory fee. The statutory revision also created Miss. Code Ann. Sec. 49-17-422 that established an Advisory Council to conduct an independent study of the cost of the UST Program and provide the Commission a written report and recommendations on the annual tank fee. This report was provided to the Commission on December 31, 2019. Staff provided information on the report, recommendations, and the public notice for comment. This agenda item was presented for informational purposes only.

Pollution Emergency Response Regulations

Ted Lampton, MDEQ Legal Counsel reported on the Pollution Emergency Response Regulations. Pursuant to Mississippi Code Sections 17-17-29, 49-17-43, 49-17-27, and 49-17-68, persons who cause pollution or own facilities which cause pollution are liable for the cost of remedial or clean-up action resulting from such pollution. The purpose of this new regulation is to include these various sources of statutory authority for pollution emergency response and to include definitions to provide clarity and consistency in the implementation of these statutes related to emergency response requirements. If adopted by the Mississippi Commission on Environmental Quality, this regulation will be codified at Title 11, Part 9, Chapter 1 of the Mississippi Administrative Code. A public hearing on the new regulation was held on December 12, 2019. No written or verbal comments were received from the public related to the proposed regulation. A copy of the proposed regulations is included in the Commission’s packet for review prior to the Commission’s meeting on February 27th. Staff recommended and the Commission approved adoption of this new regulation.

Modification of Hinds County Solid Waste Management Plan

Ted Lampton, MDEQ Legal Counsel reported on the Modification of Hinds County Solid Waste Management Plan. An evidentiary hearing was held on September 19, 2019, regarding Commission Order No. 6772-17, which approved the modification of the Hinds County Solid Waste Management Plan to allow for the expansion of the Faircloth Class I Rubbish Site. The hearing was held before Hearing Officer Doug Levanway. Hearing Officer Levanway presented his findings of fact and recommended decision at the Commission’s November 15, 2019, meeting. In his findings and recommended decision, the Hearing Officer recommended that the Commission affirm the Order which approves the modification of the Hinds County Solid Waste Management Plan allowing for the expansion of the Faircloth Class I Rubbish Site by an additional 26.55 acres. The Commission considered the Hearing Officer’s recommended decision after reviewing the previously provided record which includes the Petition for Hearing, the transcript of the Motion Hearing, the transcript of the Evidentiary Hearing, exhibits to the transcripts (including pre-filed testimony submitted by the parties-William G. (Bill) Moore-Petitioner, Hinds County Board of Supervisors-Intervenor, Faircloth Rubbish Landfill, Inc.-Intervenor and MDEQ), Motions to Intervene, Motions in Limine, Responses to Motions, witness lists, and the Hearing Officer’s Findings of Fact and Recommended Decision. The Commission then voted to adopt the Hearing Officer’s Recommended Decision to affirm the issuance of Commission Order No. 6772-17, which approved the modification of the Hinds County Solid Waste Management Plan to allow for the expansion of the Faircloth Class I Rubbish Site. Staff will recommend that the Commission adopt an Order reflecting its previous decision in this matter which is included in the Commission’s packet for review prior to the Commission meeting on February 27th. Staff recommended and Commission approved that Interim Executive Director Chris Wells be authorized to sign the Order on behalf of the Commission.

Certifications Approved since the last report

Type Number
Asbestos Certifications 292 certifications
Lead Paint Certifications 147 certifications
Underground Storage Tanks (UST) Certifications 22 certifications to those who install, alter, or remove underground storage tanks
Wastewater Operator Certifications 70
Emergency Clean-Up Expenses 8

Administrative Orders

27 Administrative Orders and 2 Amended Agreed Orders were issued since the last report, and they will added to the minutes.

This Newsletter is a publication of the Environmental Department of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

IRS Circular 230 Notice

To ensure compliance with requirements imposed by the IRS, we inform you that, unless specifically indicated otherwise, any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein.

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Mississippi Environmental Quality Permit Board

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The Mississippi Environmental Quality Permit Board (“Board”) convened its regular monthly meeting at 9:00 a.m. on March 10, 2020, at the offices of the Mississippi Department of Environmental Quality, in Jackson.  Chris McDonald chaired the meeting.

The Board approved minutes from the February meeting and the non-controversial actions/ certifications completed by the staff since the February meeting.

Following a prepared agenda, items considered were as follows:

OFFICE OF GEOLOGY

Ron Porter (MDEQ Office of Geology, Mining and Reclamation) presented the MDEQ Staff’s recommendations and Board approved the following:

Surface Mining Bond Releases

Permittee County Permit Staff Recommendation
Meggs Dirt & Gravel, LLC Attala P10-008 Initial 60%
Milton Chad Coffey Union P07-014T Final 80%
Milton Loper Madison P94-038 Final 10%
Milton Loper Madison P89-010 Final 90%
Milton Loper Madison P93-100 Final 10%
Joe McGee Construction Co. Madison P11-024 Final 10%
Joe McGee Construction Co. Rankin P14-022 Initial 90%

Surface Mining Permit Transfer

Permittee County Permit
Benefield Sand Company to Ripley Sand Tippah P93-059

OFFICE OF POLLUTION CONTROL

401/STORMWATER BRANCH

Belle Fontaine Subdivision, Jackson County – Consideration of Issuance of a 401 Water Quality Certification (WQC2017103).

MDEQ Staff presented to the Board and recommended approval of the above-referenced application.  Belle Fontaine Subdivision requested the permit in connection with a proposed single-family residential subdivision. MDEQ received letters of objection from adjacent property owners citing flooding, wetland impacts and endangered species issues among others; however, no one appeared at the meeting.  The Application was amended to address the concerns of the adjacent property owners.  A representative for Belle Fontaine Subdivision spoke at the meeting stating that he had met with the property owners regarding the existing flooding problems and stated that the subdivision was designed to meet 100-year flood standards and that this should solve current flooding problems with the neighbors.  The Applicants are required to purchase mitigation credits before construction.  After a question from the Board, the Board approved the Application.

Golden Bay Investments, Oak Landing RV Park (“Golden Bay”), Harrison County – Consideration of Issuance of a 401 Water Quality Certification (WQC2017056).

MDEQ Staff presented to the Board and recommended approval of the above-referenced application.  Golden Bay requested the permit in connection with a proposed upscale RV park. MDEQ received letters of objection from adjacent property owners citing drainage, flooding, wetland impacts and endangered species issues among others; however, no one appeared at the meeting.  The Application was amended to address the concerns of the adjacent property owners. A representative for Golden Bay spoke at the meeting stating that he had met with the property owners regarding the existing drainage problems and stated that the subdivision was designed to meet 100-year flood standards and that this should solve current drainage problems with the neighbors.  The Applicants are required to purchase mitigation credits before construction.  After a question from the Board, the Board approved the Application.

AIR II BRANCH

Jackson Memorial Funeral Service, LLC, Hinds County – Buffer Zone Variance Request (Air Ref. No. 1080-00264)

Staff presented but did not provide a recommendation to the Board concerning an application for buffer zone variance from 150-foot setback to the minimum setback to 110 feet for one adjoining property owner and 95 feet for another property owner.  Staff stated that contiguous land owners were contacted.  A representative from the funeral home visited with the abutting property owners regarding the variance, and the property owners stated that they have no objection to the variance.  No one in opposition appeared at the meeting.  The Board approved the variance.

Other Business

Roy Furrh, MDEQ Legal Counsel reminded the Board Members that the Evidentiary Hearing regarding Mississippi State Port Authority, North Port Property in Harrison County is scheduled for May 12, 2020.

Mr. Roy Furrh also reminded the Permit Board members that they need to complete their annual compliance forms and statement of economic interest forms and turn in their Designee Letters.

The next Permit Board meeting will be held on April 14, 2020, at 9 a.m.

This Newsletter is a publication of the Environmental Practice Group of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

If you have any questions concerning the content of a newsletter, or if you would like further information about the matters addressed in a newsletter, please contact John Milner, the Brunini Firm Environmental Practice Group leader, at jmilner@brunini.com or (601) 960-6842.

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CORONAVIRUS AND THE INTERRUPTION OF YOUR BUSINESS

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As rapidly as the coronavirus is spreading its footprint across the globe, businesses of all shapes and sizes are closing their doors … and losing income.  Unfortunately, Mississippi businesses are not exempt from this fast moving reality.  Indeed, coffee shops, boutiques, restaurants, office complexes, and a variety of other businesses across the State have been forced to drastically change their operations or, in some cases, completely shutter their businesses in response to the coronavirus pandemic and the related government directives concerning travel and social distancing.  As a result, many companies are already reporting lost profits, as well as a significant concern about the future of their businesses.

Fortunately, most companies carry a commercial property insurance policy, which typically includes not only coverage for property damage but also coverage for lost profits incurred as a result of damage to the covered property.  In other words, a business may have coverage for its coronavirus lost profits through its commercial property policy.  To know that, an insured should first review its policy to determine if it contains any of the following types of coverages which are frequently included in a commercial property policy.

Business Income/Interruption 

Business Income/Interruption Coverage provides coverage for the loss of income an insured sustains as a result of a suspension of an insured’s operations.  However, most policies require that the suspension stem from “direct physical loss or damage” caused by a “covered peril” (typically theft, fire, wind, falling objects or lightning) to the specific covered property.  This type of coverage is most commonly found in circumstances where an insured’s covered property is damaged by a fire, or perhaps a storm, forcing the insured to suspend its operations for a period of time.  In that scenario, the fire or storm damage to the subject property would be readily apparent, and assuming it is a covered peril, the claimant would have a strong claim for the income lost during the restoration period.  However, a claim for lost income as a result of the coronavirus will be much more complex.

First, an insured will need to demonstrate “direct physical loss or damage” to its covered property.  Given the nature of the coronavirus, however, there likely will be no apparent damage to the property.  So, insureds will likely contend that, regardless of its visibility or lack thereof, the virus is within their workplace – albeit at a microscopic level – and that it is has in fact damaged their covered property.

Courts have heard similar arguments in other contexts (e.g. asbestos, gasoline fumes, etc.) and reached varying conclusions.  Some have sided with the insureds that the contaminant damaged the property, while others agreed with the insurers that the contaminant had not damaged the insured’s property.  This determination, which will involve a detailed analysis of the relevant policy and applicable law, will be the critical issue in evaluating these claims for coverage.

Next, an insured should review its policy to determine if it excludes coverage for business interruption claims based on communicable diseases.  Due to the SARS outbreak in 2003, the insurance industry purportedly paid out a significant amount of claims based on “business interruptions” caused by SARS.  After the SARS outbreak, and to avoid a repeat, the insurance industry began excluding losses incurred by communicable disease.  Perhaps most importantly, in 2006, the heavily relied upon Insurance Services Office (ISO) issued form CP 01 40 07 06 excluding “loss or damage caused by or resulting from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness or disease.”  Determining whether the insured’s policy contains this exclusion will be a critical component of any coverage analysis.

Contingent Business Interruption

Commercial property policies routinely include coverage for disruptions in an insured’s supply chain.  This coverage applies when damage occurs not to the insured’s property but to the property of others relied on by the insured to supply materials to the insured or its customers.  Again, it is important to note that these policies usually require damage or physical loss caused by a covered peril to the supplier’s property.  As with the Business Income/Interruption claim, the specific language of the policy will be critical in this analysis.

Order of Civil Authority

Many commercial property insurance policies provide coverage for business income losses sustained when a “civil authority” prohibits or impairs access to the policyholder’s premises.  Some of these policies do not require “physical loss” to the insured’s covered property, and those that do sometimes do not require that the physical loss occur to the insured’s own property.  Thus, if a governmental authority – federal, state, or local – prohibits or even limits access to an area including an insured’s business, the insured may have coverage for its loss of income under its “civil authority” coverage.  Yet again, analysis of the specific language in the policy and applicable law will be critical in determining coverage.

The First Coronavirus Coverage Case

On March 16, 2020, Oceana Grill in New Orleans, Louisiana filed what is thought to be the first lawsuit – of many more to come – dealing with a coronavirus business interruption coverage dispute (Cajun Conti, LLC, et al. v. Certain Underwriters at Lloyd’s London, et al., Civil District Court for the Parish of Orleans, Louisiana).

In its Petition for Declaratory Judgment, Oceana Grill requested a declaration of coverage for coronavirus-caused losses under a business interruption policy.  Oceana contends that it purchased an “all risk policy” from Lloyd’s of London, “which covers all risks unless clearly and specifically excluded” and further contends that “the policy does not provide any exclusion due to losses, business or property, from a virus or global pandemic.”

With respect to harm caused by the virus, Oceana contends that:

[T]he scientific community, and those personally affected by the virus, recognize the Coronavirus as a cause of real physical loss and damage….The virus is physically impacting public and private property, and physical spaces in cities around the world….The global pandemic is exacerbated by the fact that the deadly virus physically infects and stays on the surface of objects or materials, ‘fomites,’ for up to twenty-eight days, particularly in humid areas below eighty-four degrees….It is clear that contamination of the insured premises by the Coronavirus would be a direct physical loss needing remediation to clean the surfaces of the establishment.

Oceana also pointed out that the Louisiana Governor issued a statewide order banning gatherings of 250 or more people and the New Orleans Mayor issued additional operating restrictions on businesses.

For these reasons, Oceana has asked the Court to declare that:

  1. The policy provides coverage to Plaintiffs for any future civil authority shutdowns of restaurants in the New Orleans area due to physical loss from Coronavirus contamination; and
  2. The policy provides business income coverage in the event that the coronavirus has contaminated the insured’s premises.

This will be an important case to monitor as the coronavirus crisis and resulting business interruption coverage disputes continue.

The Brunini attorneys are closely monitoring developments in the coronavirus crisis and are counseling clients through the various legal and business issues involved in the crisis.

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A Message from Brunini to our Clients and Friends (COVID-19)

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As we all work to address the growing personal and business challenges presented by COVID-19, Brunini wants to assure our clients, friends, and the public that we will continue providing top-notch legal services uninterrupted by the ongoing public health crisis.  The firm activated its business continuity policies and procedures some time ago, and we are taking every precaution possible to protect the health, safety and welfare of our clients, the entire Brunini Team and their families.  Among other protective measures:

  • Brunini lawyers and staff may work remotely and securely, as may be needed for each individuals’ circumstances, to ensure we continue to serve our clients’ legal needs without interruption;
  • Brunini has implemented enhanced cleaning efforts to protect our lawyers, staff, clients and families, and encourages safe practices and hygiene to minimize the person to person spread of the coronavirus;
  • For some time Brunini has limited non-essential travel of its lawyers and staff, and has established procedures for employees to self-monitor and self-quarantine in the event of potential exposure in high-risk areas; and
  • Brunini encourages social distancing in our practice, including promoting the use of remote meeting technology to help our lawyers and clients avoid unnecessary exposure to potential risks, and we are prepared to adjust our means of communicating as may be needed to suit clients’ specific needs and capabilities.

We recognize that our clients, friends, and the public are being impacted by this challenging public health crisis and are dealing with many difficult and novel business issues.  We are here to help with employment concerns, tax issues, insurance coverage questions or any other legal assistance you might need.  Contact information is available on our website (www.brunini.com), or you may call (601)948-3101 for assistance in reaching any member of our team.