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July 2012

Another U.S. Supreme Court Water Challenge Case

Grayson_Lynn_COLORBy E. Lynn Grayson

 

The Colorado River Water transfer pacts are at issue again in a new petition for review recently filed. In Cuatro Del Mar v. Imperial Irrigation District, U.S., No. 12-53, 7/11/12, Cuatro Del Mar, a citrus and palm tree grower, accused the Imperial Irrigation District and other agencies of violating agricultural water users' constitutional rights in approving contracts that grew out of the Quantification Settlement Agreement (QSA) that brought California into compliance with its federally allotted portion of Colorado River water.

At issue is the process the Imperial Irrigation District used to approve the QSA contracts, which increased flows to urban users and reduced diversions to agricultural operations. Plaintiffs argued they were deprived of their due process rights when the agreement was executed. Only a small portion of the contracts was made available to agricultural users, and there was insufficient public notice, they said. Also, the plaintiffs said they were further deprived of due process when the contracts were validated using a state statute adopted specifically for the QSA, which does not offer legal recourse.

The petition poses two questions: "(1) What are the minimal procedural due process protections required under the 14th Amendment of the U.S. Constitution before the government can act to reduce the water availability and perfected rights of agricultural users in the Imperial Valley? (2) Does a California court's decision legitimizing the use of automatic validation 'by operation of law' effectively rewrite the laws of eminent domain and inverse condemnation and amount to either a violation of the Takings Clause of the Fifth Amendment or of substantive due process?"

This case highlights the growing conflict between differing water users – here urban users versus agricultural users. Water-related legal challenges likely will increase as water scarcity concerns emerge.


California Issues Final Draft Of Green Chemistry Regulations

Siros_Steven_COLORBy Steven M. Siros

 

On July 27, 2012, California's Department of Toxic Substances Control ("DTSC") released what might be a final draft of California's green chemistry regulations that are anticipated to be finalized by the end of 2012. The intent of these regulations is to identify particular chemicals of concern in consumer products and then to require industry to prepare "alternatives assessments" to evaluate whether substitute chemicals are economically and technically feasible. In October 2011, DTSC released an earlier draft of the regulations which were strongly criticized by both industry and environmental groups. Significant changes from the prior drafts include the following:

  1. The number of "chemicals of concern" was reduced from approximately 3,000 to 1,200 (although additional chemicals can always be added);
  2. The "alternatives assessment" requirements have been relaxed to eliminate requirements to provide information that would be difficult and/or costly to obtain;
  3. The exemption for products regulated under other laws (i.e., FDA, FIFRA) has been eliminated; and
  4. Information relating to the potential hazards of a chemical can not be designated as trade secret information.

Notwithstanding these revisions that are clearly intended, at least in part, to address concerns from both industry and environmental groups, it is expected that these draft regulations will trigger many comments from interested parties. DTSC's efforts to address these comments may push the effective date of these regulations into 2013. Click hereto go to DTSC's Green Chemistry website for further information on the draft regulations.


New EPCRA Tier I and Tier II Updates

Grayson_Lynn_COLORBy E. Lynn Grayson

 

EPA has proposed changes to EPCRA Section 312 Tier I and Tier II Emergency and Hazardous Chemical Inventory Forms required under 40 CFR Part 370. The new rules become effective January 1, 2014.

The reporting requirements under the community right-to-know provisions of EPCRA sections 311 and 312 are on-going obligations. These requirements apply to owners and operators of facilities that are required to prepare or have available a material safety data sheet (MSDS) for a hazardous chemical defined under the Occupational Safety and Health Act (OSHA) Hazard Communication Standard (HCS). If the hazardous chemical is present at or above the reporting thresholds specified in 40 CFR part 370, the facility owner or operator is required to submit a MSDS or a list that contains the hazardous chemical under EPCRA section 311. Under EPCRA section 312, if a hazardous chemical is present at or above the reporting threshold specified in 40 CFR part 370, the facility owner or operator is required to submit an emergency and hazardous chemical inventory form (Tier I or Tier II) to the SERC, LEPC and the local fire department by March 1 annually.

EPA will require facilities to report whether the facility storing the chemicals is manned or unmanned and the maximum number of employees who may be present at the facility at one time on both the Tier I and Tier II forms. Additionally, companies will be required to provide contact information of the facility emergency coordinator, Tier I and Tier II contact information, as well as the email addresses of the owner or operator and emergency contact. Companies will have the option of providing facility phone numbers as well.

For the Tier II forms, EPA will also require facilities to report the latitude and longitude of storage sites as well as the identification numbers assigned under the Toxic Release Inventory and risk management program. The Tier II form also will add separate data fields to report pure chemicals as well as mixtures.

EPA had proposed requiring facilities to provide contact information for parent companies on both the Tier I and Tier II forms as well. It did not finalize that requirement. Instead, facilities will have the option to list that information.

For more information, including the new rule, visit EPA's EPCRA webpage at http://www.epa.gov/oem/content/epcra/ .


TSCA Reform: What Lessons Can We Learn From REACH?

Siros_Steven_COLORBy Steven M. Siros

 

On Thursday, July 26th, Jenner & Block's Environmental and Workplace Health & Safety Law practice will host "TSCA Reform: What Lessons Can We Learn From REACH?" a lunch CLE program to be held in the Chicago office from 12:00 – 1:00pm CST. This presentation is also being offered as a webinar. The presentation will provide a general overview of TSCA, discuss REACH and the ongoing efforts to reform TSCA, and review State efforts to regulate chemicals.  Please Click Here to Register for the Event.


Top 10 Corporate Environmental Concerns

By E. Lynn Grayson and Katherine M. Rahill

On July 18, 2012, Jenner & Block Partners, E. Lynn Grayson and Katherine M. Rahill published a guest column in Law360 discussing new and emerging environmental issues important to in-house counsel.  These issues include:

  1. Lack of Government Resources/Insufficient Funding
  2. Superfund/UAOs
  3. Environmental Disclosures
  4. Corporate Environmental Responsibility
  5. Water Scarcity
  6. Memoranda of Understanding (MOUs)
  7. Financial Assurance
  8. Soil Vapor Intrusion
  9. EPA Toxicological Reviews
  10. Improvements in Technology

Lynn and Katie are partners in the Environmental and Workplace Health & Safety Law Practice and may be reached at lgrayson@jenner.com and krahill@jenner.com.  More information is available at www.jenner.com.

To access the full article, please click here.

FDA Announces Ban on BPA in Bottles and Sippy Cups

By Katherine Rahill

On July 17, 2012, the U.S. Food and Drug Administration (“FDA”) issued a final rule amending its food additive regulations to ban the use of polycarbonate resins in baby bottles and sippy cups.  Bisphenol A (“BPA”) is a key component of polycarbonate resins.  The ban is in response to a petition by the American Chemistry Council seeking an amendment to food additive regulations to no longer allow for the use of BPA-based resins in these products. FDA’s regulations allow for a petitioner to seek an amendment to the food additive rules based on a number of rationales including the development of new uses, the abandonment of old uses, or new information as to toxicity of a chemical.   Interestingly, the basis for the petition, and the FDA’s final rule, is the abandonment of the use of BPA-based resins in these applications and not concerns about the safety of BPA-based resins in these products or food storage generally.  The FDA’s February 17, 2012 proposed rule (77 FR 9608) expressly stated that the FDA would not consider comments regarding the safety of BPA-based resins for food storage and that the FDA was reviewing the safety of BPA separate from the petition.  According to the final rule, the petition cited a poll of BPA-based resin manufacturers in which the manufacturers stated that they were no longer selling these resins to manufacturers of baby bottles and sippy cups used in the United States as evidence of such abandonment.  In granting the petition and issuing the final rule, the FDA found that information provided in the petition and available from other sources demonstrated that the use of BPA-based resins in the manufacture of baby bottles and sippy cups has been “completely and permanently abandoned.” 77 Fed. Reg. 41899, at 41901.  According to a press release issued by the American Chemistry Council, this amendment will clear up confusion and provide certainty to consumers that BPA is not contained in baby bottles and sippy cups.

The issuance of the final rule banning the use of BPA-based resins in baby bottles and sippy cups came on the same day the FDA announced the filing of a petition by Representative Edward Markey (D-Mass) seeking the banning of BPA-based epoxy resins in coatings used in packaging infant formula.  Similarly, this petition is also based on abandonment.  As a result, the FDA requested comment only on whether this use of BPA resins has been completely abandoned and whether the use has been adequately defined.  The notice expressly states that any comments regarding the safety of BPA-based resins will not be considered. 

A copy of the final rule can be found here.  A copy of the notice of petition can be found here.


The U.S. Appellate Court’s Decision Upholding Obama’s Climate Change Regulations: Impact On Business And The Environment

Grayson_Lynn_COLORBy E. Lynn Grayson

 

Jenner & Block Partner Gay Sigel will speak today during a webinar at noon Central about the business implications of Coalition for Responsible Regulation v. EPA, No. 09-1322, U.S. Ct. App. D.C. Cir. (6/26/12). In this important new case, the U.S. Court of Appeals for the District of Columbia Circuit handed the Obama Administration's EPA a significant victory in its attempts to regulate greenhouse gases under the Clean Air Act.

The Latest EPA Criminal Enforcement Statistics

Graham_Robert_COLORBy Robert L. Graham

 

In fiscal year 2011, EPA's criminal enforcement program exceeded 2010 outcomes for new environmental crime investigations opened and the total level of incarceration, as shown by the chart below.

FY2011

As the chart shows, 371 environmental crime cases were opened in 2011—a 7% increase from 2010. But there was also a decrease in the number of defendants charged (217 individuals and 32 companies)—a 14% decrease from the prior year. This resulted in a total of 89.5 years of incarceration and $35 million in fines and restitution.

Although these criminal enforcement statistics from the EPA provide a quantitative picture of criminal enforcement results, they provide little insight into perhaps the more substantive question—whether the quality of justice resulting from environmental criminal enforcement has improved. Though useful, the bean counting of cases opened and criminal sanctions imposed does not necessarily measure true environmental progress.


NAS Concludes No Link Between Fracking And Groundwater Contamination

Siros_Steven_COLORBy Steven M. Siros

 

On July 9, 2012, the National Academy of Sciences ("NAS") released a study that found no direct link between hydraulic fracturing ("fracking") and contamination of certain shallow groundwater aquifers in northwestern Pennsylvania. The NAS study acknowledged the existence of pathways between the deeper formations (where fracking occurs) and the shallow drinking water aquifers. However, the study found that these pathways existed prior to any drilling activities having taken place in the area. The study further acknowledged that although contamination (brine) has been identified in these shallow zone aquifers and that the contamination may be the result of migration from the deeper formations, the contamination did not correlate with the locations of existing shale-gas wells. Furthermore, the current data is consistent with reported groundwater data collected prior to shale-gas exploration activities having occurred, leading the authors of the study to conclude that the contamination was naturally occurring (as opposed to having been caused by the fracking operations). The study did acknowledge, however, the possibility that these pre-existing pathways could provide a conduit for contamination from fracking operations to contaminate shallow zone aquifers and recommended further evaluation of these pathways. To see a copy of the study, please click here.


New Water Scarcity Mapping Tool

Grayson_Lynn_COLORBy E. Lynn Grayson

 

The World Resources Institute recently released its Aqueduct Water Risk Atlas (Atlas) to help companies identify water-related risks. The Atlas is a tool that provides geographical and sector-specific water risk context for companies. The Atlas is intended to generate risk maps that will help companies understand the complexities of water risk and to manage their exposure to such risks. When completed, the Atlas will include a global map for current and future water scarcity and water quality as well as detailed, multi-variable risk maps for the most water-stressed, economically significant river basins around the world.

As water scarcity emerges as one of the defining challenges of the 21st century, companies are realizing that a company's water use can pose significant risk to its bottom line. Dwindling or variable water supplies can bring manufacturing to a halt. Deteriorating water quality can lead to higher capital and operating treatment costs. Changes in regulation can expose polluting industries to fines and sanctions. Additionally, a company's reputation can be damaged by unsustainable water use, leading to a decline in sales and revenues. Further complicating the issue, exposure to water risk in all of its forms varies significantly from region to region and across sectors.

The Atlas is based upon a water risk framework identifying 14 indicators in 3 categories of water risks to business.

  1. Physical Risks: Quantity – captures a measure of the risks to business driven by having access to too little water (scarcity) or threatened by too much water (floods);
  2. Physical Risks: Quality – captures a measure of the risks to business driven by water that is unfit for use due to pollution; and,
  3. Regulatory and Reputational Risks – captures a measure of the risks to businesses driven by unstable regulatory environments and social tensions and conflicts around water.

The Atlas is focused upon measuring and mapping water risks in a manner relevant and meaningful to business. The project is supported by business leaders including GE, Dow, Goldman Sachs, Talisman Energy and Bloomberg.

The Atlas is available at http://insights.wri.org/aqueduct/atlas including access to a blog that addresses international water scarcity concerns.