A California appellate court recently affirmed a lower court decision that had concluded that an insured’s failure to obtain consent from its excess insurer barred it from recovering insurance proceeds from that insurer. In 2001, a lawsuit was filed by residents of a Missouri town seeking damages against the insured relating to alleged contamination from a lead and cadmium smelting operation. Zurich Insurance Company was the primary liability insurer and had agreed to provide a defense of the action. Fidelity & Casualty of New York (“F&C”) was an excess carrier and had received notice of the underlying litigation. The matter was resolved during a mediation and the insured agreed to settle the residents' claims for $55 million. However, F&C was not notified of the settlement until a month later.
Partner Allison Torrence discusses mobile-source emissions and the Clean Air Act in a new video in Jenner & Block’s “Insights” series. Allison focuses her discussion on enforcement and the EPA’s increasingly stringent standards. She also examines EPA actions that recently have been in the news regarding “defeat devices” that turn on vehicle emission controls during testing in EPA labs and turn off the controls when the vehicles are on the road.
In 2015, the United States Court of Appeals for the 9th Circuit vacated U.S. EPA’s registration of the insecticide sulfoxaflor, finding that U.S. EPA lacked adequate data to ensure that its registration would not harm non-target species, and more specifically, bees. Following the 9th Circuit’s decision in September 2015, U.S. EPA reversed its position on two other pesticide registrations. In October 2015, U.S. EPA indicated that it planned to ban the agricultural use of chlorpyrifos notwithstanding U.S. EPA's previously stated intention to work with industry to mitigate the risks as opposed to an outright ban. In November 2015, U.S. EPA sought to voluntarily vacate its prior registration of Enlist Duo on the basis that U.S. EPA had obtained new data suggesting that the combined toxicity of its two ingredients (glyphosate and 2,4-D) was higher than originally believed. U.S. EPA was facing litigation in the 9th Circuit with respect to both of these pesticides which likely played a role in those decisions. In addition, U.S. EPA’s anticipated decision with respect to the reregistration of glyphosate has been delayed on multiple occasions and is now expected sometime in 2016.
These actions are all suggestive that U.S. EPA has elected to adopt a more stringent approach with respect to its risk reviews of pesticides under the Federal Insecticide, Fungicide and Rodentcide Act (FIFRA) and the Endangered Species Act (ESA). Such an approach is likely to result in significant delays in getting pesticide products registered and to the market. We will continue to follow these issues as we await U.S. EPA’s glyphosate reregistration decision which is likely to be the next significant U.S. EPA action in the FIFRA arena.
The United States Environmental Protection Agency ("U.S. EPA") recently announced its 2015 enforcement statistics, noting that for fiscal year 2015, U.S. EPA initiated enforcement actions resulted in $404 million in penalties and fines. In addition, companies were required to invest more than $7 billion to control pollution and remediate contaminated sites; convictions for environmental crimes resulted in 129 years of combined incarceration for convicted defendants; and there was a total of $39 million committed to environmental mitigation projects that benefited communities throughout the United States.
The largest single penalty was the result of a Clean Air Act settlement with two automobile manufacturers that resulted in a $100 million penalty, forfeiture of emissions credits and more than $50 million being invested in pollution control and abatement measures. U.S. EPA's 2015 enforcement numbers were up from 2014 ($100 million in fines and penalties collected in 2014).
Please click here to go to U.S. EPA's 2015 enforcement statistics website.
Delegates from almost 200 nations worked through the night on Friday and into Saturday, working to create the 48-page “Draft Paris Agreement,” made public on Saturday, December 5th. The draft agreement will be the subject of continued negotiations this week in Paris, with the goal of finalizing a long-term climate change agreement among all parties by the end of the week.
The draft agreement lays out three broad goals:
- "To hold the increase in the global average temperature [below 1.5 °C] [or] [well below 2 °C] above preindustrial levels by ensuring deep reductions in global greenhouse gas [net] emissions;
- "To Increase their ability to adapt to the adverse impacts of climate change [and to effectively respond to the impacts of the implementation of response measures and to loss and damage];
- "To pursue a transformation towards sustainable development that fosters climate resilient and low greenhouse gas emission societies and economies, and that does not threaten food production and distribution."
The draft agreement contains many options that will need to be agreed on by negotiators, including:
- The precise goal of the agreement;
- How countries are divided into developed verses developing nations; and
- Whether the agreement’s GHG emissions reductions should be legally binding.
The last point represents a current difference between China and U.S. negotiators. China is pushing for an agreement that is legally binding in its entirety. The U.S. has argued that GHG emissions cuts should not be legally binding; perhaps a pragmatic position due to the fact that legally binding emissions cuts could require the U.S. submit the agreement for approval by the U.S. Senate, which would likely reject any such proposal.
The Corporate Environmental Lawyer blog will continue to track developments from Paris and provide insight and analysis over the week ahead.
As the President and other top officials participate in climate change negotiations at the COP21 in Paris, lawmakers back home are pushing to maintain a role in determining U.S. climate policy. Specifically, House Republicans have proposed a resolution regarding the President’s authority in the COP21 negotiations. House Concurrent Resolution 97, introduced on Nov. 19th by Rep. Mike Kelly (R-Pa.), expresses the view that “the President should submit to the Senate for advice and consent the climate change agreement proposed for adoption at [COP21].” The resolution expresses concerns that the agreement coming out of COP21 will contain enforceable targets and timetables for GHG emissions reductions and that the U.S. will be expected to “commit billions of dollars in taxpayer money to fund the Green Climate Fund and other financial mechanisms to fund mitigation and adaptation projects in developing countries.” Thus, the resolution would establish that Congress believes that any commitments made by the U.S. at COP21 will have no effect until submitted to the Senate for advice and comment. The resolutions goes further to suggest that Congress would refuse to consider any funding for the Green Climate Fund until all agreements are submitted to the Senate for advice and consent. The resolution has been referred to the House Committee on Foreign Affairs.
In a related action, on Dec. 1st, the House passed two resolutions (S.J.Res. 23 and S.J.Res. 24) disapproving of the Administration’s GHG regulations applicable to existing and new power plants. The Senate voted last month to approve identical motions. The President is expected to veto these resolutions.
Meanwhile, the American Sustainable Business Council (ASBC), a group of 200,000 businesses and 325,000 business executives, owners, and investors, has drafted a letter to Congress expressing the group’s support for climate negotiations in Paris and calling on Congress to not interfere. They urge Congress to “allow the climate experts, business and civic leaders and negotiators to craft an effective agreement in Paris.” ASBC is encouraging members of the public to sign on in support of their letter.
CERES is urging world governments meeting now at the COP21 this week in Paris to produce a strong climate agreement. CERES believes that recent actions confirm that the business and financial communities support clean energy and a low-carbon transition. The actions cited by CERES include:
World leaders and delegates from over 150 nations have converged in Paris, France for the United Nations Climate Change Conference (also referred to as COP21). The conference, which is scheduled to run from November 30th through December 11th, has as its goal achieving a legally binding agreement intended to limit greenhouse gas emissions in order to ensure that global average temperatures do not increase in excess of two degrees Celsius over pre-industrial global temperatures.
Leaders of both the United States and China addressed the conference attendees. President Obama noted that recent economic growth in the United States has come despite a lack of growth in carbon emissions, proving that climate advancements need not come at the expense of the economy or individual livelihoods. Chinese President Xi Jinping struck a somewhat different tone, saying that the conference "is not a finish line, but a new starting point" and that "any agreement must take into account the differences among nations” and that “countries should be allowed to seek their own solutions, according to their national interest."
Prior to the conference, countries had voluntarily submitted climate action plans referred to as Intended Nationally Determined Contributions (“INDCs”) that are intended to form the basis for any agreement that might be reached over the next two weeks. According to the United Nations Secretary General, more than 180 countries have submitted their INDCs which covers almost 100% of global greenhouse gas emissions. However, in order to reach the above-referenced goal of less than a two degree temperature increase, the Secretary General noted that developed countries would need to be prepared to expend $100 billion dollars by 2020. What if anything the developing countries would need to contribute is much more nebulous but is a topic that is certain to be discussed at the conference.
We will continue to blog on COP21 over the next several weeks while the conference is in session.
This week, Law360 published Lynn Grayson’s article titled "MBTA Unintended Consequences Of An Old Law." This article discusses the Migratory Bird Treaty Act (MBTA) and addresses whether the 1918 law is really effective today in safeguarding migratory birds from modern day threats. Ms. Grayson comments that “…the MBTA has changed very little but the world we live in has changed a great deal and the most significant threats to migratory birds today are vastly different than in the past.”
The article examines how modern day business and real life circumstances often expose companies and individuals to non-compliance and even potential criminal prosecution for incidental takings in the context of the MBTA. While U.S. Fish & Wildlife Service (FWS) traditionally manages incidental take matters through reliance upon voluntary guidelines, restricted permitting options and agency enforcement discretion, she questions whether that approach continues to work today.
Ms. Grayson concludes that “…Without legislative or possibly regulatory change, MBTA compliance for industry remains complicated, uncertain and costly. All industry sectors are entitled to a fair and just statute that delineates in a straightforward manner what is required to comply with the MBTA, as well as a clear understanding of the enforcement consequences of noncompliance. The new FWS proposal (discussed in the article) may be a step in the right direction. An even better development would be an MBTA amendment consistent with the recent Fight Circuit Citgo ruling that imposes strict liability only in cases of intentional and direct takes of migratory birds.”
Lynn Grayson and Steven Siros Publish Article on U.S. Legal and Regulatory Developments in Nanotechnology
Lynn Grayson and Steven Siros have published an article in the most recent issue of DRI’s Toxic Tort and Environmental Law Newsletter titled Nanotechnology: U.S. Legal and Regulatory Developments. In the article, Ms. Grayson and Mr. Siros discuss how nanotechnology affects every sector of the U.S. economy and impacts our lives in a myriad of ways through the 1,600 nanotechnology-based consumer goods and products we use on a daily basis. The article provides an overview of how nanotechnology is defined, insights on the regulatory framework and recent developments, possible concerns about nanomaterial use, and risk management considerations for U.S. businesses utilizing nanotechnology.
The full article is available here.