On June 29, 2010, the United States Court of Appeals for the District of Columbia affirmed a district court's grant of summary judgment in favor of the United States Environmental Protection Agency ("U.S. EPA") in General Electric Company v. Jackson. In a case that was originally filed in 2000, General Electric challenged U.S. EPA's use of unilateral administrative orders ("UAOs") to compel parties to remediate contaminated properties as being violative of the Fifth Amendment's due process clause. More specifically, General Electric argued that the issuance of a UAO violates the rights of Potentially Responsible Parties ("PRPs") to due process, because a PRP cannot challenge an UAO until after the remedial work required by the UAO has been performed. As a result, according to General Electric, the UAO process, in violation of the Fifth Amendment, deprives the PRP of two types of protected property interests: (1) the money that a PRP must spend to comply with the UAO or face the threat of daily fines and treble damages for non-compliance and (2) an impaired market and brand value, and an impaired ability to obtain financing, all of which, General Electric argued, were a result of the issuance of an UAO. Because the UAO process does not afford a party the right to seek judicial review prior to carrying out the order, General Electric contended that CERCLA's UAO provisions violated the due process clause.
On June 25, 2010, the Government Accountability Office (GAO) published a report entitled Nanotechnology: Nanomaterials Are Widely Used in Commerce, but EPA Faces Challenges Regulating Risk (See GAO Report). In this report, the GAO notes that companies are increasingly using nanoparticles in the products they manufacture and that industry is diligently conducting research and development in new and innovative ways to incorporate nanoparticles into new materials and products that will reach the market in the not-to-distant future. The GAO acknowledges that the body of research on nanomaterials is growing. However, at the same time, the GAO notes that little is known about the risks nanomaterials pose to human health and the environment. As a result, the GAO strongly encourages the U.S. EPA to expand and improve its efforts to collect data and information on nanomaterials so that it may effectively regulate the manufacture and distribution of products containing nanoparticles.
Gabrielle Sigel and Jennifer Cassel, attorneys in Jenner & Block's Environmental, Energy & Natural Resources Law Practice, recently posted to Jenner & Block's Climate Change Update Resource Center their May 2010 Update of Climate Change developments. Of note in the May update are discussions of the Kerry/Lieberman draft climate legislation in the Senate and of EPA's finalization of its greenhouse gas "tailoring rule" for stationary sources. Click here to read the May 2010 Climate Change Update.
On June 18, 2010, OSHA implemented its Severe Violators Enforcement Program ("SVEP") against employers who have "demonstrated indifference" to OSH Act compliance. (Click here to read OSHA's SVEP Instruction in its entirety.) The OSHA Instruction describing the program, CPL 02-00-149, replaces OSHA's Enhanced Enforcement Program, which was first announced in 2003.
An employer is deemed to qualify as one who has demonstrated indifference if any of the following criteria are met:
- Fatality or catastrophe (3+ employees hospitalized) after one or more willful or repeat violations or a failure to abate a serious violation.
- Two or more willful, repeat or failure-to-abate violations based on high gravity serious violations of a "High-Emphasis Hazard." A High-Emphasis Hazard includes fall hazards in all industries and amputation, combustible dust, crystalline silica, lead, excavation/trenching, and shipbreaking hazards as covered by OSHA National or Special Emphasis Programs.
- Three or more willful, repeat, or failure-to-abate violations based on high gravity serious violations related to hazards from the release of a highly hazardous chemical, as defined in the Process Safety Management Program, 29 CFR § 1910.119.
According to a General Accountability Office report issued June 22, 2010, EPA’s estimated costs to remediate existing Superfund sites exceed current funding levels. Moreover, given that EPA anticipates adding about 20 to 25 sites each year to the Superfund’s National Priorities List, funding shortfalls may be even more significant. In a hearing before the Senate Environment and Public Works Subcommittee on Superfund, Toxics and Environmental Health, EPA asked Congress to reinstate a series of taxes that had financed the Superfund Trust Fund but which expired in 1995. The Superfund Trust Fund was used to cleanup sites for which no responsible party could be identified or in cases where the party was insolvent.
These taxes on oil and chemical producers and importers were part of the original Superfund law but such funds were exhausted in 2003. Since that time, EPA’s funding for the cleanup of orphan sites has come from general revenues.
Sen. Frank Lautenberg (D-N.J.) has introduced a bill, the Polluter Pays Restoration Act (S. 3164), that would reinstate these taxes. Sen. James Inhofe (R-Okla.) believes the Obama administration is taking advantage of the political climate arising from the BP oil spill to attempt to reimpose these taxes on oil and gas companies. According to Sen. Lautenberg, however, it's all about the cleanup statistics. EPA cleaned up an average of 80 sites a year while funding existed. Last year, EPA only remediated 19 sites.
More information is available in the GAO report titled EPA’s Estimated Costs to Remediate Existing Sites Exceed Current Funding Levels, and More Sites Are Expected to Be Added to the National Priorities List. Click here for GAO report.
On June 22, 2010, Judge Martin Feldman, of the U.S. District Court for the Eastern District of Louisiana, issued a preliminary injunction blocking the Obama Administration’s moratorium on deepwater oil drilling. The lawsuit, Hornbeck Offshore Services, LLC, et al. v. Salazar, et al., Case No. 10-1663, was originally brought by a company that owns a fleet of vessels that support deepwater oil exploration in the Gulf of Mexico. Additional vessel owners and companies that otherwise support offshore exploration and drilling joined the case as plaintiffs soon after it was filed. After the plaintiffs’ filed a motion for preliminary injunction, several environmental organizations, including the Sierra Club, intervened as defendants supporting the government’s position.
Gabrielle Sigel and Genevieve Essig, attorneys in Jenner & Block's Environmental, Energy & Natural Resources Law Practice, recently posted to Jenner & Block's Environmental Cost Recovery & Lender Liability Update Resource Center their May 2010 Update of Environmental Cost Recovery developments. Of note in this month's update are summaries of the 9th Circuit's June 2 decision in U.S. v. Aerojet Gen. Corp. and the U.S. District Court of New Jersey's May 26 decision in Raritan Baykeeper, Inc. v. NL Indus.
Click here to read the May 2010 Environmental Cost Recovery & Lender Liability Update.
In Secretary of Labor v. ConocoPhillips Bayway Refinery, OSHRC No. 07-1045 (June 15, 2010), the Occupational Safety & Health Review Commission ("OSHRC") modified the judgment of an Administrative Law Judge ("ALJ") who had affirmed OSHA's citation of violations of the asbestos regulations as "serious violations." (Click here to read OSHRC's Decision and Order) In this case, Conoco employees were working in an underground pipeline when they chipped and cut through tar-like material containing asbestos at between 2 to 25%. OSHA found that Conoco had violated the "asbestos in construction" standard, 29 CFR § 1926.1101. OSHA characterized all of the violations as "serious," and the ALJ affirmed that characterization and assessed a penalty of $1,875 for each of the nine cited items.
OSHRC reversed the "serious" characterization, finding that OSHA had not proven that the 20-30 minutes of work on the coating around a pipe sleeve "could have generated, and exposed Conoco employees to, a harmful amount of asbestos." OSHRC Opinion at p. 3. The employees were found to be doing Class II asbestos work, which is "not presumed to generate any particular level of asbestos." Id. at p. 4.
Given that the Secretary of Labor had failed to introduce "case-specific evidence" of an exposure to a harmful amount of asbestos, OSHRC changed the violations' characterization to "other-than-serious" and reduced the penalty to $350 per violation.
On June 8, 2010, Illinois Governor Pat Quinn signed into law Public Act 096-0908, which amended the Illinois Environmental Protection Act's "Leaking Underground Storage Tank" program. The amendments to the LUST program included an expanded incorporation of the Tiered Approach to Corrective Action Objectives ("TACO") into the LUST program, a reduction of the deductible to $5000 to qualify for reimbursement under the program, and new bidding requirements an owner of a LUST must follow to qualify for program. The amendments also implemented measures to stabilize the funding for the LUST program, to provide funding for legacy LUST sites and to create opportunities for owners/operators, who had received No Further Remediation letters, to access the LUST fund in the event additional remediation measures had to be performed.
On June 2, 2010, the U.S. Court of Appeals for the Ninth Circuit held that a non-settling PRP's right to contribution under CERCLA was a legally sufficient interest to justify intervention to challenge a proposed consent decree between the federal government and the settling PRPs, joining ranks with the Eighth and Tenth Circuits, the only other U.S. appellate courts to address the issue. The case is U.S. v. Aerojet Gen. Corp., No. 08-55996 (9th Cir. Jun. 2, 2010).
On May 24, OSHA published a proposed rule to amend its walking-working surfaces and personal protective equipment standards, Subparts D and I of the General Industry Standards. The proposed revisions are intended to reduce the number of workplace injuries and fatalities due to slips, trips and falls by requiring the use of updated technologies and current industry practices. Among other changes, the revisions in Subpart D would require employers to provide fall protection to all employees working at heights of four feet or more and would establish specific requirements for the fall protection system used. Revisions to Subpart I would establish criteria and performance requirements for the use of personal fall protection systems.
The revisions would also make general industry requirements more consistent with those in the construction and maritime industries. Like the construction standard, the proposed rule would eliminate the preference for guardrails and would, instead, permit employers to choose from one of several conventional fall protection systems (guardrail systems, safety net systems, travel restraint systems, and personal fall protection systems) or non-conventional means, such as establishing designated areas for work, provided established criteria are met.
This new proposed rule supersedes the proposal published in the Federal Register on April 10, 1990 (55 FR 47660) and republished on May 2, 2003 (69 FR 23528) but retains many of its provisions. One notable difference, however, is that the recent proposal eliminates the option to designate qualified climbers, except in outdoor advertising. OSHA seeks additional comment on that issue as well as on the application of the rule to rolling stock and motor vehicles, fall protection on stacked materials, and building anchorages for rope descent. Comments are due by August 23, 2010.
EPA announced the release of the draft Toxicological Review of Formaldehyde – Inhalation Assessment in the June 2, 2010 Federal Register. EPA found that the chemical, present in a wide variety of consumer products, causes cancer when inhaled. The new findings also conclude that formaldehyde could be up to five times more likely to cause cancer in people than the EPA calculated in 1989 when it classified the chemical as a probable human carcinogen. The Centers for Disease Control and Prevention estimates that U.S. residents typically are exposed to daily formaldehyde concentrations of 10 ppb to 30 ppb indoors. By comparison, EPA’s draft assessment proposes candidate reference concentrations for this chemical ranging from 4 ppb to 9 ppb.
The Formaldehyde Council, Inc. (“FCI”), a non-profit association that represents the leading producers and users of formaldehyde in the U.S., disagrees with EPA’s findings in the draft report. FCI plans to submit additional comments detailing the industry’s position and welcomes the further review to be conducted by the National Academy of Sciences.
EPA seeks public comments on this draft assessment through July 31st. EPA has scheduled a public listening session that will be held on July 27th.
In a May 27, 2010 Federal Register notice, U.S. EPA announced that it will begin reviewing Confidential Business Information ("CBI") claims for health and safety studies submitted under the Toxic Substances Control Act and will reject the CBI claims that do not meet TSCA's requirements for CBI treatment. (TSCA Section 8(e).) U.S. EPA not only will review new submissions but the Agency also intends to reevaluate CBI claims in prior submissions. U.S. EPA will issue determination letters rejecting CBI claims where the health and safety study claimed as containing "Confidential Business Information:" (1) does not explicitly contain process information or (2) does not reveal data disclosing the portion of the mixture comprised by any of the chemical substances in the mixture. This action is part of U.S. EPA’s continuing efforts to make available to the general public information the relevant studies that assess the health and safety risks of chemicals. To review the federal register notice, please click here.