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The Massachusetts Environmental Trust

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The Massachusetts Environmental Trust The Massachusetts Environmental Trust Charles H.W. Foster* and Frances H. Foster** In 1988, the Massachusetts legislature established the Massachusetts Environmental Trust to administer Boston Harbor pollution settlement funds. Since that time, the Massachusetts Environmental Trust has emerged as a national model for innovative management and distribution of environmental settlement funds. This Article presents a history and analysis of the Trust based on personal accounts by Massachusetts Environmental Trust insiders and archival records. The analysis exposes significant flaws in environmental settlement practices. The settlement process is unpredictable and opaque. The settling parties often lack the expertise needed to apply settlement funds effectively. Yet, they fail to consult, involve, or inform those who could best assist in that effort—affected communities and environmental experts. Settlement terms frequently value punishment and deterrence over environmental benefit. Even when settlements seek to address environmental damage, they define that damage too narrowly. As a result, the funds often go to short-term, small-scale, or even unrelated projects while much of the damage that was the subject of the settlement remains unaddressed. The Massachusetts Environmental Trust provides an environment- centered model designed to enhance predictability, transparency, participation, and expanded use of settlement funds. The Massachusetts Environmental Trust’s experience demonstrates that an independent third party with environmental expertise and community knowledge, contacts, and reputation Copyright © 2014 Regents of the University of California. * Charles H.W. Foster (1927–2012) was a past Massachusetts Commissioner of Natural Resources, the Commonwealth’s first Secretary of Environmental Affairs, a former dean of the Yale School of Forestry and Environmental Studies, and a senior research fellow at the Harvard Kennedy School. Among the fifty years he spent in public and private service were nineteen years as a founding trustee and vice chairman of the Massachusetts Environmental Trust (MET). ** Frances H. Foster is the Edward T. Foote II Professor of Law at Washington University School of Law, where she specializes in trusts and estates law. We thank MET Program Director William W. Hinkley for generously sharing with us materials and insights into MET settlements. We are grateful to Lynn LoPucki and Daniel Mandelker for comments on previous drafts of this Article. We thank the Massachusetts Historical Society for permission to quote from, cite, and reproduce archival materials. 751 752 ECOLOGY LAW QUARTERLY [Vol. 41:751 can develop and administer the flexible, creative, individualized schemes needed to respond to present and future damage to the natural and human environments. Introduction ...................................................................................................... 753 I. Origins of the Massachusetts Environmental Trust ............................. 756 A. The Boston Harbor Litigation ....................................................... 757 B. Creation of the MET ..................................................................... 759 1. National Developments .......................................................... 759 2. State Developments ................................................................ 762 C. The Settlement Agreement and Enabling Legislation .................. 764 II. Institutional Challenges ........................................................................ 765 A. Credibility ..................................................................................... 765 1. Trustees ................................................................................... 765 2. Operating Rules and Grantmaking Criteria ............................ 767 B. Supplementary Funding ................................................................ 769 C. Jurisdiction .................................................................................... 771 1. Geographical Expansion ......................................................... 771 2. Substantive Expansion ............................................................ 772 D. Independence ................................................................................ 777 III. Settlements ........................................................................................... 783 A. Goals ............................................................................................. 784 B. Process .......................................................................................... 787 1. Sources of Settlement Funds .................................................. 787 a. Litigants ........................................................................... 787 b. Judges ............................................................................... 788 c. Community Groups .......................................................... 790 d. Another Environmental Trust .......................................... 792 2. Impetus ................................................................................... 792 a. Contacts by Litigants and Other Interested Parties .......... 792 b. MET Initiatives ................................................................ 794 3. Reasons for Selection of the MET as a Settlement Funds Recipient ................................................................................. 796 a. Experience ....................................................................... 796 b. Success ............................................................................. 796 c. Expertise .......................................................................... 797 d. Independence ................................................................... 797 e. Flexibility ......................................................................... 798 C. Use of Settlement Funds ............................................................... 800 1. Implementation of Settlement Restrictions ............................ 800 2. Funding Approaches ............................................................... 802 3. Insistence on an Active Role .................................................. 804 4. Remediation and Beyond ........................................................ 806 IV. Settlement Process Flaws and Reforms ................................................ 809 2014] MASSACHUSETTS ENVIRONMENTAL TRUST 753 A. Flaws ............................................................................................. 809 1. Unpredictability ...................................................................... 809 2. Lack of Transparency ............................................................. 811 3. Limits on Participation ........................................................... 813 a. Affected Communities ..................................................... 813 b. Outside Experts ................................................................ 815 4. Constraints on the Use of Funds ............................................. 815 a. Dominance of Punishment and Deterrence over Environmental Benefit ..................................................... 816 b. Narrow Definitions of Victim and Harm ......................... 817 c. Nexus Requirement .......................................................... 819 d. Exclusion of Third Party Administration of Settlement Funds ................................................................................ 822 B. Reforms ......................................................................................... 823 1. Addressing Flaws in the Settlement Process .......................... 823 a. Promoting Predictability .................................................. 823 i. Advocating Changes in Settlement Law, Policy, and Practice ............................................................... 824 ii. Using Settlements to Promote Changes in Environmental Law, Policy, and Practice ................. 827 b. Enhancing Transparency .................................................. 827 c. Encouraging Participation ................................................ 830 i. Affected Communities .............................................. 830 ii. Outside Experts ......................................................... 831 d. Expanding the Use of Settlement Funds .......................... 832 2. Introducing an Environment-Centered Model ........................ 834 3. Building a Constituency ......................................................... 836 Conclusion ....................................................................................................... 838 INTRODUCTION In a 1994 keynote address, Joel Gross, Deputy Chief of the Justice Department’s Environmental Enforcement Section, proclaimed environmental trusts “unheralded successes of the environmental movement.”1 Environmental trusts originated in the mid-1970s as a “new approach . to help remedy environmental damage.”2 The trusts receive funds from environmental offenders and the developers of projects that harm the environment. The funds include fines and penalties for illegal pollution discharges and permit 1. Maynard Goldman, Letter from the Chairman, in MASS. ENVTL. TRUST, 1995 ANNUAL REPORT 3 (1995) [hereinafter 1995 MET ANN. REP.] (quoting Joel Gross). 2. Environmental Credit Projects under Clean Water Act: Hearing on H.R. 3411 before the H. Subcomm. on Fisheries, Wildlife Conservation &
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