Does China Sword Trigger a Force Majeure Clause?

An April 2015 NW&RA/SWANA Joint Advisory presciently counselled “allowances for changes in the contract over time due to circumstances such as: acts of God, changes in market conditions (including but not limited to lack of commercially reasonable market availability for processed recyclables . . . and changes in law . . .). ”  Similarly, the MassDEP’s 1997 recycling Contract Template contains optional language requiring the hauler to provide “alternative recycling services and compensation to the municipality” if the contractor fails to accept recyclables because of facility or service failures “not resulting from a force majeure event.” Likewise, a municipal recycling collection/processing contract that we negotiated for a hauler in 2013 had a robust force majeure clause that excused defaults based upon “acts of government or regulatory authorities”. .  . “which substantially affect, impact or impede the Contractor’s or the Town’s operations.”

Whether you are a municipality or commercial customer reaping the benefits, or a hauler or processor whose contract is upside down, it behooves you to look into the possibility that the China Sword standard excuses performance of the contract as a force majeure event, change in law or perhaps under the contract doctrines of impossibility or frustration of purpose.

Without going into great legal detail, the bottom line is that a broadly drafted force majeure clause such as the one quoted above may excuse a hauler or processor from performance of its contract.  Under the example above, as an official standard of the Chinese Ministry of Environmental Protection, the China Sword standard is an act “of government or regulatory authorit[y]” that should qualify as a force majeure event.  If the new standard “substantially affect(s), impact(s) or impede(s) the Contractor’s operations,” the contractor’s failure to perform should be excused.  Alternatively, parties to longer term contracts may have a separate change in law clause that will require them to adjust or renegotiate price.

Absent either of these types of clauses, the parties may need to rely upon legal theories of impossibility or frustration of purpose to justify a renegotiation. However, it is worth noting that the Massachusetts courts do not favor these contract defenses where the issue is simply a change in price.  For example, in a construction dispute involving a spike in the price of steel, Judge Gordon of the Superior Court found no excuse for performance and noted that “unchanging prices and other cost-impacting conditions cannot realistically be considered implied assumptions of contracts at the time of execution, and, therefore, performance will not be excused under the doctrine of frustration of purpose merely because prices have fluctuated.”  Fargo Management LLC v. City of Worcester, Memorandum of Decision and Order on Summary Judgment, C.A. No. 2012-1028C (Worc. 2014).

For questions, call or email Tom Mackie.

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Firm Successes – Fall 2017

Tom Mackie and John Shea were selected by Best Lawyers of America (2018 edition) for Environmental Law and Environmental Litigation.  The Firm was ranked in Best Law Firms as Tier 1 Boston and Tier 2 nationally.  Best Lawyers is the oldest and most respected peer- review publication in the legal profession for “legal expertise, ethics and professionalism of the highest caliber.”

Peter Durning obtained Special Permits approving the Town of Concord’s replacement of an aged public water supply treatment facility and surface water intake pipe, after a year-long hotly contested public hearing.      

John conducted a multi-day public hearing on a transfer station site assignment modification for the Northbridge Board of Health.

Peter obtained an Order of Conditions approving a uniquely designed single-family home against vociferous neighborhood opposition for over a year in Arlington.

The New England Real Estate Journal selected John’s client’s commercial mixed-use development as “Project of the Month” (September 22-28, 2017, Section B, centerfold, nerej.com).  Olde Shrewsbury Village was a colonial-style shopping center with a footbridge at the junction of Routes 9 and 20 in Shrewsbury.  Turtle Rock, LLC, the owner, developed an ambitious revitalization plan that included relocating an internal stream to the property perimeter in order to create parking close to the retail shops.  Mackie Shea was on an elite development team that advanced a creative technical, legal and political strategy, and over four years secured local, state and federal permits and approvals.  Little Bummet Brook was transformed from a stormwater drainage ditch into a vibrant stream and ecosystem.  Construction was timed to avoid potential impacts to the Northern Long-Eared Bat, a newly listed endangered species.

John obtained two novel Advisory Opinions under MEPA. The first confirmed that land alternation (including a 5-year look back) did not require environmental review for a 50-acre commercial subdivision in Lancaster.  He also secured a Determination from MassDEP that a wastewater treatment plant is not required, and assisted in obtaining public water supply wells for the “anchor” businesses.  The second Advisory Opinion confirmed that an Eversource solar power array on his client’s coal ash landfill was non-jurisdictional, and could proceed with MassDEP post-closure use permitting.

John negotiated Administrative Consent Orders (ACO) with MassDEP approving wetland restoration and mitigation for sedimentation for a national home builder, a regional condominium developer, and a national assisted living and memory care company for historically filled wetlands and an MCP Brownfields cleanup.

Tom successfully defended against a Town’s attempt to invalidate the extension of contracts to operate a municipal transfer station, and to transport and dispose of the Town’s waste; negotiated a purchase and sale agreement for acquisition of a recycling facility on a Brownfields site; and obtained a site assignment modification allowing a construction and demolition debris processing facility to transfer by rail municipal solid waste and mildly contaminated soil.

Tom obtained reconsideration and reversal of a regional electrical transmission authority’s determination that a request for extension of an interconnection agreement with a transmission company was a major modification, avoiding new interconnection studies and applications.

Tom and John were named for Environmental Law and Peter for Environmental Litigation to the 2017 Massachusetts SuperLawyers List.  Gail Hire was selected as a Rising Star.  SuperLawyers have attained a high degree of peer recognition and professional achievement.  The designations are based on third-party research, balloting by lawyers, and a peer review process.

MassDEP is Calling RCC Permit Applications

If you are operating a recycling or composting facility under a Determination of Need (DON) and have not updated your permitted status, time is up.  The final deadline to bring a DON facility into compliance with the 2012 recycling/composting regulations was May 23, 2017.  If you have not filed papers with MassDEP yet, you need to act now.

Owners of DON facilities have one of three options: certify that the facility is exempt under 310 CMR 16.03, certify that the facility qualifies for a “General Permit” under 310 CMR 16.04 or apply for a site specific “Recycling Composting and Conversion” (RCC) Permit under 310 CMR 16.05.

The requirements to qualify for a General Permit are stricter than those that applied to a DON.  Consequently, you may find that your DON facility now requires a site specific RCC permit. For example, to qualify for a recycling facility General Permit the owner/operator shall “ensure that the operation handles recyclable materials and residuals only within a handling area, containers or trucks that are sufficiently enclosed and covered to prevent a public nuisance.” We understand that the Department interprets this to mean that all asphalt, brick and concrete recycling operations must be enclosed to qualify for a General Permit, which was not a DON requirement under the old regulations.

Due to the stricter General Permit criteria, and the dramatic consequences of filing a false or incorrect “Certification” with the MassDEP, we are advising clients to consult with us before filing a Certification to come into compliance.

For questions, call or email Tom Mackie.

MassDEP to Open 2020-2030 Solid Waste Master Planning

This summer the MassDEP Solid Waste Advisory Committee will begin reviewing “Pathway to Zero Waste,” the 2010-2020 Solid Waste Master Plan. While it may seem early for the Committee to start the process for a 2020 plan, this is a notoriously slow process.  The MassDEP did not issue the 2010-2020 Master Plan until April of 2013, so starting three years before 2020 seems about right.

Although the Department has not set an agenda, the focus should be on raising the flattened waste reduction curve and responsibly managing the waste that is generated.  Environmental groups will continue to advocate “zero waste,” pushing for more waste bans and better enforcement of existing bans. Meanwhile, they will continue to actively oppose expansions of existing disposal or new facilities by drumming up fears of public health and environment harm.

The solid waste industry has openly embraced economically viable zero waste solutions (while quietly investing in waste export rail infrastructure). Industry skepticism is fueled by the economic realities of a protracted soft market for recyclables, relatively low local disposal pricing and high profile siting battles.  The wisdom of continued reliance on waste export as opposed to lifting the moratorium on new municipal solid waste combustion capacity will be front and center on the industry agenda.

For questions, call or email Tom Mackie a newly appointed member of the Solid Waste Advisory Committee.

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