In a 2-1 decision on February 28, 2019, the full Occupational Safety and Health Review Commission (“OSHRC”) vacated the U.S. Secretary of Labor’s Occupational Safety and Health Administration’s (“OSHA”) citation charging a roofing contractor with a “general duty clause” violation for exposing employees “to the hazard of excessive heat from working on a commercial roof in the direct sun” and separately vacated a citation for failure to train employees regarding heat-related risks. Sec’y of Labor v. A.H. Sturgill Roofing, Inc., OSHRC Docket No. 13-0224. OSHA had issued the citations following the physical collapse and subsequent death of a temporary worker on the first day of his work for the roofing company.
Different from a violation based on an OSHA regulation, a general duty clause violation alleges that the employer has violated the federal Occupational Safety and Health Act’s provision stating: “Each employer … shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.” 29 U.S.C. § 654(a)(1).
OSHA Rescinds Electronic Submission of Injury/Illness Logs and Incident Reports and Raises Penalties
On January 25, 2019, the U.S. Occupational Safety and Health Administration (OSHA) issued a Final Rule eliminating the requirement that certain employers electronically submit to OSHA information from their annual OSHA 300 log of workplace injuries and illnesses and their OSHA 301 incident reports, which are required to be created after each logged injury and illness. OSHA also announced that, pursuant to annual escalating requirements, penalties for OSHA violations in 2019 would increase to a maximum of $132,598 per willful or repeat violation and a maximum of $13,260 for all other types of violations.
Pursuant to a regulation issued in the final year of the Obama Administration, employers of establishments with 250 or more employees were to be required to submit information from their 300 logs and 301 reports annually to OSHA through an electronic portal. However, the portal was never established during the Obama or Trump Administrations, and the submission obligation was repeatedly suspended until, through the Final Rule, the electronic submission requirement was rescinded entirely.
OSHA described the Final Rule rescinding the submission requirement as primarily driven to “protect worker privacy,” because the OSHA 300 logs and 301 reports contain identifying information which “might be publicly disclosed” under Freedom of Information Act (FOIA) requests or otherwise. In the Final Rule’s preamble, OSHA stressed that its position is that data electronically submitted to OSHA regarding injuries and illnesses are exempt from FOIA public disclosure, both to protect OSHA’s enforcement efforts and to protect employees’ privacy. OSHA stated, however, that despite its position, it is concerned that “it still could be required by a court to release the data,” if it had not rescinded the broader submission requirements. OSHA also expressed concern that, if information from the 300 logs and 301 reports had been electronically collected pursuant to the regulation as issued in 2016, there were increased risks of cyber-security issues involved in protecting sensitive information. OSHA also stated that by rescinding the electronic submission requirement, OSHA can “focus its resources on initiatives that its past experience has shown to be useful … rather than on collecting and processing information from Forms 300 and 301 with uncertain value for OSHA enforcement and compliance assistance.”
Employers of establishments with 250 or more employees, or with 20-249 employees in designated high-hazard industries, remain obligated to annually, electronically submit information from OSHA Form 300A, which summarizes information from the annual OSHA 300 log and 301 reports. The OSHA Summary Form 300A for 2018 injuries and illnesses must be physically posted at each establishment by February 1, 2019, and submitted electronically to OSHA by March 2, 2019. The Form 300A electronic submission information also has been amended to require employers to include their Employer Identification Number (EIN). The requirement to electronically submit the 300A Summary and EIN applies nationwide, including to employers in the 28 State Plan States.
The January 25, 2019 Final Rule does not change the obligation of employers in most industries (unless specifically exempted) to maintain OSHA 300 logs and 301 reports at their establishments, for inspection by OSHA, employees, and their representatives. In addition, all employers continue to be required to report to OSHA, within prescribed time periods, when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. State requirements regarding injury reporting may be more stringent than those imposed by federal OSHA.
OSHA’s Directorate of Enforcement Programs recently issued an enforcement memorandum to all OSHA Regional Administrators providing a new “Enforcement Policy for Respiratory Hazards Not Covered by OSHA Permissible Exposure Limits” (“Enforcement Policy”). OSHA’s 2003 policy on the same topic is now superseded and archived.
The Enforcement Policy explains how and when OSHA will cite an employer for respiratory hazards from an air contaminant under the OSH Act’s General Duty Clause (“GDC”). The GDC is the statutory requirement that an employer “furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.” 29 U.S.C. § 654(a)(1). By regulation, OSHA has stated that “An employer who is in compliance with any standard in this part shall be deemed to be in compliance with the requirement of section 5(a)(1) of the Act, but only to the extent of the condition, practice, means, method, operation, or process covered by the standard.” 29 CFR 1910.5(f). There is an open question as to whether and when an employer is in violation of the law if either (a) OSHA has not set a regulatory exposure limit for a particular chemical; or (b) exposures are below OSHA’s regulatory Permissible Exposure Limit (“PEL”), but above another organization’s recommended occupational exposure limit (“OEL”) for the same chemical. An OEL can be issued by, for example, an industry group, U.S. EPA, the National Institute for Occupational Safety and Health, or the American Conference of Governmental Industrial Hygienists.
OSHA’s new Enforcement Policy states that a GDC violation for airborne chemical exposures cannot be alleged unless OSHA can meet the 4-element standard of proof imposed by the courts for any GDC violation:
On December 11, 2018, the U.S. EPA and the U.S. Army Corps of Engineers jointly issued a proposed rule to define the basic jurisdictional reach of the federal Clean Water Act (“CWA”), which applies to protection of the “navigable waters” of the U.S. The proposed rule defines the term “waters of the United States,” which establishes the scope of waters subject to the CWA (“the Proposed WOTUS Rule”). The definition of WOTUS has been the subject of decades of litigation, including at the U.S. Supreme Court, see Rapanos v. U.S., 547 U.S. 715 (2006), itself a divided opinion. The Trump Administration’s WOTUS rule, when issued in final, would replace the definitional rule issued in June 2015 by the Obama Administration. 80 Fed. Reg. 37054. Obama’s 2015 rule itself was the subject of litigation; including after the Trump Administration attempted to delay application of that rule. See, e.g., Puget Soundkeeper Alliance v. Wheeler, No. C15-1342-JCC (W.D. Wash. Nov. 26, 2018). As of now, 28 States are not subject to the 2015 rule, but to the definition of WOTUS pursuant to rules issued in 1977 and the 1980s, as well as decisions of the Supreme Court and the agencies’ guidance and practices.
The Proposed WOTUS Rule, which the Trump Administration states is consistent with the Rapanos plurality opinion written by Justice Scalia, purports to provide “clarity, predictability, and consistency” and, by limiting the scope of the CWA’s jurisdiction, “gives states and cities more flexibility to determine how best to manage waters within their borders.” By setting forth “six clear categories of waters” that are considered WOTUS, the Proposed WOTUS Rule seeks to ensure that the CWA applies only to those waters “that are physically and meaningfully connected to traditional navigable waters.” The six categories are, in general:
Exelon and Jenner & Block partnered today with the Alliance for the Great Lakes to cleanup 12th Street Beach, near the Adler Planetarium. Team members worked together to police the beach front picking up and disposing of waste and other discarded materials. The litter was identified, logged, recorded and weighed to aid in understanding the short term and long term impacts we are having on the Great Lakes and the many ecosystems that rely upon them.
The Alliance for the Great Lakes Adopt-a-Beach program promotes working together to protect the Great Lakes through beach cleanups and other community projects. For more than 25 years the Adopt-a-Beach program has worked to keep Great Lakes shorelines healthy, safe, and beautiful. The program is largest of its kind in the region. Adopt-a-Beach touches all five Great Lakes with volunteers from all eight Great Lakes states.
Thanks to our friends at Exelon for including us in this special environmental outreach!
On Monday, June 12, 2017, Jenner & Block's Environmental and Workplace Health & Safety Practice Group is hosting a special program targeted at environmental lawyers titled Drilling Down on the Risks: Ethics and Liabilities for Environmental Practitioners. The program will be held from 11:45-1:30 at Jenner & Block’s offices, 353 North Clark Street, in Chicago. You may participate in the program in person or via a webinar.
Three exceptional speakers—Deborah Green Shortridge (ALAS), April Otterberg and Gay Sigel (Jenner & Block)—will discuss a variety of ethical concerns often confronted by environmental lawyers. They will address prior work conflicts, joint representation, common interest agreements, retaining environmental consultants in transactional and litigation matters, positional conflicts, contacting government officials, community outreach, and public statements.
The CLE program will be eligible for 1.5 professional responsibility credits in Illinois.
If you would like to join us for this CLE program, please RSVP here.
Jenner & Block Partners Gay Sigel, Steve Siros, and Allison Torrence will speak at the upcoming program Environmental, Health, and Safety Issues in 2017: What to Expect From the Trump Administration, hosted by Jenner & Block’s Environmental, Workplace Health & Safety Practice Group on Tuesday, March 7 from 12:00 pm to 1:00 p.m. With the Trump Administration beginning to take shape, federal environmental, health, and safety (EHS) policy is certain to shift to the right. This CLE program will provide an overview of the Trump Administration’s actions impacting EHS matters to date and prognosticate on changes that may be forthcoming. You are invited to join us for this special program in person or via webinar. If you plan to participate, please RSVP as indicated below.
When: Tuesday, March 7, 12:00—1:00 p.m. with lunch starting at 11:45 a.m.
Where: Jenner & Block, 353 North Clark, Chicago, IL—45th Floor Conference Center
For more information about the program and to RSVP, please connect here.
As we begin the New Year, we wanted to take a moment to look back at some of the major EHS developments in 2016 and think about what we can expect in 2017.
2016 was a busy year for the Corporate Environmental Lawyer blog, which is now in its sixth year with over 760 posts. In 2016, we had nearly 100 blog posts from 10 different authors and over 6,700 visits to the site.
Our five most popular blogs from 2016 were:
Navigating Hawkes, the Newest Wetlands Ruling from the Supreme Court, by Matt Ampleman
As always, we are monitoring a variety of issues that are important to you and your business, including, for example, RCRA regulatory changes, the future of climate change regulation, implementation of the TSCA Reform Act, and new developments in environmental litigation. You can find current information about these developments and more on the Corporate Environmental Lawyer blog. If you don’t find what you are looking for on our blog, we welcome your suggestions on topics that we should be covering. In addition, keep abreast of new developments in the EHS area through our Twitter @JennerBlockEHS.
We also look forward to the opportunity to share our thoughts and insights with respect to current EHS issues with you at an upcoming program:
- March 7, 2017, 12:00 pm CT: Environmental, Health, and Safety Issues in 2017—What to Expect From the Trump Administration, by Gabrielle Sigel, Steven M. Siros and Allison A. Torrence
The program will take place at Jenner & Block’s Chicago office and also will be available as a webinar. We will post a formal invitation to the program in a few weeks.
We also invite you to visit our newly redesigned Environmental and Workplace Health & Safety Law Practice website for more information about our practice. We look forward to another exciting year and to connecting with you soon.
On May 12, 2016, the U.S. Occupational Safety and Health Administration ("OSHA") issued a final rule addressing employers' workplace injury and illness reporting and recording obligations. 81 Fed. Reg. 29624-94. One portion of the new rule addresses retaliation against employees who report a work-related injury or illness (collectively, "injury") to an employer. Specifically, new § 1904.35(b)(1)(iv) provides: "You must not discharge or in any manner discriminate against any employee for reporting a work-related injury or illness." 29 CFR § 1904.35(b)(1)(iv). OSHA also added another new rule: An employer “must establish a reasonable procedure for employees to report work-related injuries and illnesses promptly and accurately. A procedure is not reasonable if it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.” 29 CFR § 1904.35(b)(1)(i).
The new rule, particularly § (b)(1)(iv), was challenged in federal court, with plaintiffs seeking a nationwide preliminary injunction prohibiting the rule's enforcement. TEXO ABC/AGC, Inc. v. Perez, No. 3:16-CV-1998 (N.D. Tex. July 8, 2016). On November 28, 2016, the court denied plaintiffs' request for an immediate injunction, but said that its decision on the preliminary injunction does not reflect its decision on the merits of plaintiffs' legal challenges to the rule. Without the preliminary injunction, OSHA may begin enforcing the new rule as of December 1, 2016.
Trade Associations Obtain Nationwide Injunction Against Portions of the “Fair Pay and Safe Workplaces” Regulatory Scheme, and Agencies Stand Down (For Now)
Portions of the Fair Pay and Safe Workplaces regulations, specifically those related to reporting violations of labor laws and restricting mandatory arbitration, have been enjoined on a nationwide basis by the District Court for the Eastern District of Texas (“District Court”). The paycheck transparency provisions were upheld by the District Court and remain enforceable. Following the District Court’s Order, on October 25, 2016, federal executive agencies issued guidance to their senior procurement officials to halt implementation of the Fair Pay and Safe Workplaces regulations enjoined by the Court, and confirmed that the paycheck transparency provisions (FAR 52.2005, 22.2007(d) and clause 52.222-60) remain in effect.
As reported, the government is still weighing whether to appeal the injunction. Although it seems likely that the government will appeal the District Court’s order and argue that the District Court does not have the authority to issue the injunction on a nationwide basis, it remains uncertain whether the government could actually obtain this relief. When faced with a similar TX federal district court nationwide injunction of executive action and regulation in the context of immigration, the U.S. Court of Appeals for the Fifth Circuit upheld the district court’s authority to issue that nationwide injunction. On review, the Supreme Court split 4-4, leaving the Fifth Circuit’s decision in place. Effectively, this means that TX federal district courts and the Fifth Circuit can stall the administration’s desired policies on a nationwide basis until the Supreme Court acquires another Justice. Because we are in an election year and do not know the identity of the next Supreme Court Justice or when that Justice would be confirmed, the ultimate outcome of this injunction remains elusive at this time. However, even with some legal uncertainty, we anticipate that most government contractors would prefer to forego all but the paycheck transparency requirements until there is a greater likelihood that the enjoined regulations will be upheld than exist at this time. Indeed, even beyond the strength of the substantive arguments, the District Court briefing and oral argument made clear that had the regulations had gone into effect, the government was not yet ready to accept any reports of purported “violations” because the electronic portal to receive such data was not yet complete.
Trade Associations File Suit Challenging the “Fair Pay and Safe Workplaces” Regulatory Scheme as Unlawful and Unconstitutional
As we previously reported here, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the Final Rule and Final Guidance implementing President Obama’s Fair Pay and Safe Workplaces Executive Order (E.O. 13673), signed on July 31, 2014. Despite strenuous objections, including from groups representing defense contractors, on August 25, 2016, DOL and FAR Council finalized the rules (the “Fair Pay Regulations”) by which those who seek to contract with the government (contracts over $500,000) must disclose alleged and final wage and labor law “violations,” including non-final agency allegations of labor law violations and determinations subject to appeal. Certain portions of the Fair Pay Regulations take effect as early as October 25, 2016.
In Associated Builders and Contractors of Southeast Texas v. Fed. Acquisition Regulatory Council, Case No. 1:16-cv-00425, E.D. Tex. (filed Oct. 7, 2016), Associated Builders and Contractors of Southeast Texas (“ABC-Texas”), Associated Builders and Contractors, Inc. (“ABC”), and the National Association of Security Companies (”NASCO”) filed suit in federal district court against members of the DOL and FAR Council challenging E.O. 13673 and the Fair Pay Regulations. ABC and ABC-Texas represent nearly 21,000 member construction contractors and related firms in Texas and throughout the country. NASCO represents companies that employ more than 400,000 trained security officers.
DOL, FAR Council Finalize “Fair Pay and Safe Workplaces” Regulations, Forcing Government Contractors to Disclose Non-Final Labor Law Alleged Violations in the Contracting Process
On August 25, 2016, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the Final Rule and Final Guidance implementing President Obama’s Fair Pay and Safe Workplaces Executive Order (E.O. 13673), signed on July 31, 2014. Under this new regime, those who seek to contract with the government (contracts over $500,000) must disclose alleged and final wage and labor law “violations,” including non-final agency allegations of labor law violations and agency determinations still subject to appeal, rendered against the contractor within the last three years. The government, through newly established agency labor compliance advisors (ALCAs), will then review each of those alleged and final “violations” and determine whether to award or extend the government contract. The Rule and Guidance will take effect in phases starting on October 25, 2016.
Jenner & Block Partners E. Lynn Grayson and Gabrielle Sigel have been named “Energy & Environmental Trailblazers” by The National Law Journal. The list honors people who have “made their mark in various aspects of legal work in the areas of energy and environmental law.”
The profile of Ms. Grayson notes that she was appointed general counsel for the Illinois Emergency Services and Disaster Agency soon after the agency took over enforcement responsibility for the state’s Emergency Planning and Community Right-to-Know Act. When she moved into private practice in Chicago, she became involved in the first REIT case involving environmental issues; since moving to Jenner & Block, she has done a great deal of international due diligence. Ms. Grayson observes that the future of environmental law will involve international transactions as well as domestic work, particularly around energy and renewable energy.
The profile of Ms. Sigel notes that she focuses on the intersection of workplace health and the environment. The profile highlights one of her cases in which the water supply in retail and medical offices became contaminated, and a number of state agencies became involved. As for the future, Ms. Sigel observes that the lines between organizations will increasingly blur. “Whether it’s business, regulatory agencies, community groups or NGOs, you have to look at issues holistically, and not in a superficial way,” she says.
Jenner & Block CLE Webinar: "Climate Change Law at the Close of the Obama Administration: Understanding the Past and Implications for the Future"
Jenner & Block Partner Gabrielle Sigel will discuss the development of climate change law under the Obama Administration and how that law may affect future efforts to regulate greenhouse gas emissions. She will provide a framework for understanding some of the most complex and dynamic legal decisions regarding administrative and environmental law since the Clean Air Act was enacted. Titled “Climate Change Law at the Close of the Obama Administration: Understanding the Past and Implications for the Future,” this CLE webinar will be held from 12:00 noon to 1:30 pm on May 12, 2016, at the firm’s Chicago office, 353 N. Clark Street.
Ms. Sigel is co-chair of the firm’s Climate and Clean Technology Law Practice and a founding member of the firm’s Environmental and Workplace Health & Safety Law Practice. She publishes extensively and is a frequent speaker on environmental law, climate change, and workplace health and safety issues.
Please click here to RSVP for attend the program in person or via a webinar.
A Jenner & Block team including Partner Gabrielle Sigel and Associate Alexander Bandza of the Firm’s Environmental and Workplace Health & Safety group, supported by Partner Jessica Ring Amunson and Associate Amir Ali of the Firm’s Washington, D.C. office, won a significant victory in federal court environmental and pipeline litigation on behalf of clients Apex Oil Co., Inc. and Petroleum Fuel & Terminal Co. (PF&T). Apex and PF&T are defendants in a cost recovery and injunction action brought against them by Chevron U.S.A. Inc. in the U.S. District Court for Maryland. Chevron’s lawsuit concerns a pipeline that PF&T purchased from Chevron in 1994. Chevron has claimed more than $30mm in damages for costs of remediating pollution allegedly caused by discharges from the pipeline over the course of approximately 20 years.
Jenner & Block has been recognized by The American Lawyer in its 2015 rankings as the No. 1 law firm in the United States for pro bono service. This is the second consecutive year the firm as ranked No. 1 and the sixth time we have done so in the past eight years. The firm also has been included among the top 10 pro bono programs in the United States every year since the AmLaw initiated the survey in 1990.
In an article published this month titled “Treading Water,” The American Lawyer highlighted the important work of one of Jenner & Block’s Environmental and Workplace Health & Safety lawyers—Gay Sigel.
On June 29, 2015, the U.S. Supreme Court reversed the U.S. Court of Appeals for the D.C. Circuit and invalidated U.S. EPA's 2012 regulation of mercury and other hazardous air pollutant ("HAP") emissions from coal and oil-fired power plants. Michigan v. Environmental Protection Agency, No. 14-46.
In honor of the fifth anniversary of our entry into the blogosphere, we are excited to announce a major revamp of the Corporate Environmental Lawyer’s design. In addition to the blog’s sophisticated new look, our readers will enjoy:
- Mobile and tablet responsive technology
- A trending-categories cloud list
- Easy-to-use social sharing buttons
Streamlined navigation menus
- Access to all five years of posts
In the five years since our Environmental and Workplace Health & Safety (EHS) practice created the Corporate Environmental Lawyer, we have written more than 500 posts, provided critical updates and insights on issues across the EHS legal sectors, and been ranked among LexisNexis’s top 50 blogs. As we wish to continue to grow the blog and provide our readers with the information they want to know, Corporate Environmental Lawyer editors, Steven M. Siros and Genevieve J. Essig, encourage you to participate by suggesting new topics. We look forward to continuing to provide content covering the issues that are driving changes in environmental law.
EPA Proposes New and Differing Carbon Emission Limits for Future Natural Gas-Fired and Coal-Fired Power Plants
On September 20, 2013, U.S. EPA rescinded its first attempt and proposed new rules to establish New Source Performance Standards (NSPS), i.e., national emission limits, for carbon dioxide (CO2) emitted from new electric power plants. EPA's proposed approach is to set different limits, and different technology, depending upon whether the electric generating unit (EGU) is natural gas-fired or coal-fired plant. For coal-fired EGUs, EPA proposed a CO2 limit that requires the use of carbon capture and storage (CCS) technology for at least some CO2 emissions, and sets two different limits based on the averaging period used. Natural gas EGUs have two different limits based on their size, but CCS is not to be required for any of those EGUs. EPA's new proposed rule is a significant departure from its original proposed rule for the electric utility sector, so at the same time it proposed the new NSPS, it formally rescinded its original proposal.
As background, in April 2012, EPA proposed a single electricity output-based emission limit of 1,000 pounds (lb) of CO2 per megawatt-hour (MWh) of gross electrical output for all new fossil fuel-fired plants. This emission limit was reached by determining the CO2 emissions only from modern, newly constructed natural gas combined cycle facilities. However, no new coal-fired plant would be able to use feasible and proven technology and still meet the 1,000 lb. CO2/MWh limit. Thus, the 2012 proposed standard was based on an EPA calculation that no new coal-fired units would be built in the near future.
EPA received 2.5 million comments in response to its 2012 proposed rule, more comments than in response to any other regulation in its history. Many of those comments criticized EPA for its foundational assumption that no new coal plants would be built and accused EPA of plotting the end of coal as an energy source. In response to these comments, EPA rescinded its proposed rule. In doing so, EPA explicitly recognized that its prior modeling did not consider that (a) since April 2012, some coal-fired units had reached advanced stages of construction and development; and (b) several utilities may need to build additional coal-fired units either due to higher than usual electricity demand and/or higher than expected natural gas prices. Thus, EPA proposed to set the NSPS for coal-fired plants at a higher emission limit than for natural gas EGUs, but required coal-fired plants to use of CCS to control their emissions.
Under § 111(b) of the Clean Air Act, EPA is required to set NSPS to limit emissions of "air pollutants" from stationary sources. NSPS are established based on "BSER" – the best system of emission reduction for the particular emission source. EPA already has issued NSPS for other pollutants emitted by power plants, but not for CO2, which was recognized by the U.S. Supreme Court as an "air pollutant" in Massachusetts v. EPA, 549 U.S. 497 (2007).
The new proposed rule recognizes that BSER is different for natural gas-fired electricity generating units than it is for coal-fired units. Thus, EPA set different NSPS based on different BSER for different types of EGUs. Specifically, for natural gas EGUs, EPA proposes to limit emissions to:
- 1,000 lb. CO2/MWh for units generating greater than 850 mm BTu/hr (large units)
- 1,100 lb CO2/MWh for smaller units
All new natural gas-fired units would need to use the most current natural gas combined cycle (NGCC) technology in order to meet this limit, but EPA recognized that, even with this technology, smaller NGCC units are less efficient. EPA specifically rejected requiring CCS for any NGCC units because the technology is not used or proven effective to control emissions from those units.
For fossil fueled-fired utility boilers and integrated gasification combined cycle (IGCC) units, which primarily use coal or other solid high-carbon feedstock, EPA proposed two alternative limits:
- 1,100 lb. CO2/MWh over a 12-operating month period; or
- 1,000 lb - 1,050 lb. CO2/MWh over an 84-operating month period.
EPA provides the choice of a lower limit, but longer compliance period in order to encourage CCS technological advances and allow start-up time for that new technology. To meet either of these numerical limits, a new unit would have to use CCS to capture some of its emissions. EPA rejected requiring full CCS because of its cost, putting the price of electricity at almost three times the cost of natural gas-fired units. However, EPA estimated that partial CCS would allow prices to be within the range of other non-natural gas-fired electricity generated options, such as nuclear, biomass, and geothermal.
EPA estimates that a coal-fired unit meeting the 1,100 lb. CO2/MWh standard would emit 30-50% less CO2 than a coal-fired unit without CCS. Anticipating that its choice of CCS, even on a partial basis, will be criticized as impermissibly imposing an infeasible technology, EPA noted that two IGCC projects currently use partial CCS and two others are in advanced stages of development. EPA also stated that almost all coal-fired EGUs in planning stages intend to implement CCS on some level.
Unlike the 2012 proposed rule, EPA is planning to apply its new rule to all new power plants in the planning phase which have not yet begun construction, except for perhaps one facility that is in an advanced stage of planning, but which is not designed to meet the new emission standard. The new rule would not apply to existing EGUs or those undergoing modification or reconstruction. The new rule also would not apply to EGUs that sell less than one-third of their power to the grid; are liquid oil-fired stationary combustion turbine EGUs; or do not burn any fossil fuels, such as those burning only biomass.
EPA will be receiving public comments on this proposal for 60 days after its publication in the Federal Register, but stated its intent to issue a final rule "in a timely manner," as directed by the President's June 2013 Climate Action Plan. In the same announcement of its proposed rule for new power plants, EPA reiterated its intent to issue proposed and final rules for existing power plants by June 1, 2014 and June 1, 2015, respectively.
On September 18, 2013, the House Committee on Energy and Commerce's Subcommittee on Energy and Power held a hearing on "The Obama Administration's Climate Change Policies and Activities" in response to the President's Climate Action Plan released on June 25, 2013. The Subcommittee, chaired by Congressman Ed Whitfield (R-Ky), had invited thirteen federal agencies to attend the hearing. Energy Secretary Ernest Moniz and EPA Administrator Gina McCarthy appeared to testify on behalf of the Administration.
In the majority's memorandum announcing the Subcommittee's hearing, its purpose was described as part of the subcommittee's oversight of federal agencies' work on the issue of climate change. As background, the memorandum noted that the federal government had been spending billions on climate change related issues each year since 1993. The memorandum emphasized, however, the Obama Administration's increased focus on the issue.
In prepared remarks, EPA Administrator McCarthy stated that, "Responding to climate change is an urgent public health, safety, national security, and environmental imperative that presents an economic challenge and an economic opportunity." She described the President's plan as directing federal agencies to cut carbon pollution in America, prepare for climate change impacts, and lead international efforts, all within "existing executive authorities." Administrator McCarthy described EPA's role in all three activities, but primarily focused on EPA's role in addressing carbon pollution. She highlighted EPA's role in developing vehicle GHG emission standards and for controlling emissions from new and existing power plants.
In Secretary Moniz's prepared remarks, he began by emphasizing that the scientific basis for the "drivers of climate change" and the likely expected impacts. In describing the Department of Energy's role in the President's Climate Action Plan, he described the role of various methods of energy production in reducing CO2 emissions. He focused in particular on the need for energy efficiency and the development of technologies for a "low-carbon future." The principal action his agency has taken in the short term is to issue a draft solicitation for $8 billion in loan guarantees for advanced fossil energy technologies. He also stated that coal continued to play "a key role in our energy mix," and that his agency sought to invest in advancements in clean coal technologies. He concluded by describing the President's plan as "an all-of-the-above approach to ensure that thisenergy is used wisely and cleanly in a low carbon economy…."
The questioning of Secretary Moniz and Administrator McCarthy by Congressional members of the Subcommittee included the following topics:
- The Administration's commitment to coal and nuclear power, both of which the Administration's representatives agreed played important roles in the country's energy future.
- The effect of the upcoming proposed New Source Performance Standards for new power plants and the future rules for existing plants. Administrator McCarthy refused to discuss any details of the proposed rule to be released two days later. Chairman Whitfield later said that the Subcommittee would hold a hearing on the new proposed rule soon after it was released.
- Whether there was scientific support for the anthropogenic source of climate change. Both Republicans and Democrats stated their con and pro positions and submitted competing studies into the record.
- The President's emphasis on pursuing climate change strategies within his executive authority, which Republicans found offensive to their legislative powers.
The day before the hearings began, Senate Minority Leader Mitch McConnell (R-Ky) introduced legislation to prevent EPA from issuing rules regulating CO2 emissions from power plants unless the rules were "explicitly authorized by an Act of Congress." (S. 1514) Unlike Congress's relatively quiet response to the Administration's first-term regulations of CO2 under the Clean Air Act, Congress now promises to respond earlier in the regulatory process to President Obama's use of executive power to address climate change.
Gabrielle Sigel, Co-Chair of Jenner & Block's Climate and Clean Technology Law Practice, has written a comprehensive review of climate change law during President Obama's first term: Climate Change Law in Review, 2009-2012: Obama's First Term Changes the Climate on Climate Change. The article explores the changes and challenges in climate change law that occurred over the last four years. Ms. Sigel analyzes the actions taken by President Obama's EPA, and other federal agencies, ground-breaking legal decisions in the courts, and attempts by Congress to address these issues. Ms. Sigel also explores U.S. participation in climate action in the international sphere. The article begins:
"At the close of Barack Obama's first term as President, he was criticized by many for having done little to address climate change and by others for having done too much. Regardless of whether one thought it too much or too little, between 2009 and 2012, there was significant new government action attempting to address the effects of climate change. Notably, this climate action came primarily out of the Executive Branch, using statutes previously passed by the Legislative Branch, and challenged and defended – typically successfully – in the Judicial Branch."
On December 19, 2012, the U.S. Court of Appeals for the Seventh Circuit issued a panel decision that clarifies the law within that Circuit on issues left unresolved after several U.S. Supreme Court's decisions interpreting certain provisions of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq. ("CERCLA"). In Bernstein v. Bankert, No. 11-1501 (U.S. Ct. App. 7th Cir., Dec. 19, 2012), the appellate court addressed the rights of parties, who settle with U.S. EPA, to pursue non-settling parties for payment of their costs. The court's decision revived CERCLA causes of action that a lower court had ruled were barred under CERCLA's statutes of limitations.
The Bernstein plaintiffs are trustees of a fund that had been established to pay costs of complying with two Administrative Orders on Consent ("AOCs") that potentially responsible parties ("PRPs") had signed with U.S. EPA ‒ one in 1999 and one in 2002 ‒ to address contamination of a property in Indiana known as Third Site. At Third Site, prior to 1982, the now defunct Environmental Chemical and Conservation Company ("Enviro-Chem") had conducted waste handling and disposal activities. The 1999 AOC, which had been executed by both de minimis and other PRPs, required an environmental investigation and engineering analysis at the Site and payment of government costs. In October 2002, U.S. EPA approved the settling parties' activities under that first AOC. In November 2002, U.S. EPA issued a second AOC, this one requiring PRPs to pay for the removal action that EPA selected for the Site. Although several PRPs paid into the trust established to fund the requirements of both AOCs, the alleged former individual owners of the Site ("the Bankerts"), their corporate entity Enviro-Chem, and their insurers did not pay.
In 2008, while the removal action was still ongoing, the trustees filed a complaint against the Bankerts in the Southern District of Indiana seeking CERCLA § 9607 cost recovery, a declaration of CERCLA liability, cost recovery under Indiana's Environmental Legal Actions statute ("ELA"), and recovery under other state law claims. In response to the Bankerts' summary judgment motion, the trial court first found that the trustees could not bring a § 9607 cost recovery claim, only a § 9613(f) contribution claim, and granted the Bankerts' motion for summary judgment on statute of limitations grounds with respect to the federal and state law claims, mooting claims for declaratory judgment and against the insurers. The trustee plaintffs appealed.
The appellate court first addressed the lower court's decision that the trustees could only bring a § 9613(f) contribution claim, and not a § 9607 cost recovery claim, each of which claim has a different statute of limitations. The court provided an overview of CERCLA rights of action, including when they can be triggered. The court found that "under the plain terms of the statute": (1) a person who has been sued under §§ 9606 or 9607 can bring a § 9613(f)(1) contribution action; (2) a person who has resolved liability to the federal or state government for all or some of its costs of a response action can bring a § 9613(f)(3)(B) contribution action; and (3) a person who does not fit into the qualifications for a contribution action, but still has incurred recoverable costs, can bring a § 9607 cost recovery action. (Slip op. 18-19.) The court then analyzed the trustees' rights under each of the AOCs individually, an approach which neither side had taken in their arguments before the court.
Specifically, the court first focused on the 1999 AOC, which it determined that U.S. EPA had approved as completed in October 2000. Thus, the court determined, in October 2000, the settling PRPs had resolved their liability to the government because the government's release of and covenants not to sue the settling PRPs only applied once the work was approved and completed. Because the settling PRPs had resolved their liability to the government, they could bring a contribution action under § 9613(f)(3)(B). The court rejected plaintiffs' claim to a § 9607 cost recovery action, even though they had sustained "necessary costs of response," holding that a plaintiff "is limited to a contribution remedy when one is available." (Slip op. 27.) However, the court then found that plaintiffs' contribution action, filed in 2008, was barred under CERCLA's statutes of limitations. The court did not, however, definitively determine which such statute applied. The Bankerts argued that the statute began running when the AOC was executed in 1999, based on CERCLA § 9613(g)(3), which provides a 3-year period to file contribution action after the signing of a de minimis settlement agreement. Trustees accepted that argument with respect to de miminis parties' claims, but not with respect to the claims of other settling PRPs. The trustees argued that, because there is a "gap" in the statutory language with respect to non-de miminis parties' claims, the § 9613(g) statute of limitations applicable to § 9607 cost recovery actions should apply. The court found that under either approach, the statute had run prior to the 2008 court filing – either in 2002, 3 years after the AOC was signed, or in 2003, 3 years after the completion of the removal action required in the first AOC.
The court next found that because the work under the 2002 AOC was still continuing, plaintiffs had not yet triggered their release and covenant not to sue from the government. Because their liability to the government was not yet resolved, they could not bring a § 9613 contribution action. Because a contribution action was not available, and because they allegedly had incurred response costs, plaintiffs were able to bring a § 9607 cost recovery action. Because the removal action was not yet completed, the 3-year statute of limitations following the completion of a removal action had not yet begun to run. The court rejected the Bankerts' argument that those "compelled" to incur response costs could not recover under § 9607, finding that neither Supreme Court precedent nor other legal authority required that result. Therefore, plaintiffs could pursue a § 9607 cost recovery action and a declaratory judgment action for costs incurred under the 2002 AOC. The court noted, however, that plaintiffs may not be able to impose joint and several liability because, based on the Supreme Court's decision in Burlington N. and Santa Fe Ry. Co. v. U.S., 556 U.S. 599 (2009), the Bankerts may be able to show a "reasonable basis for apportionment" of their liability. (Slip op. 37.)
The appellate court also found that Indiana's 10-year catch-all statute of limitations applied to the ELA claim and that the statute applies separately to each of the separate AOCs, because each had a separate obligation to pay and, hence, a separate "injury" for statute of limitations purposes, even though both AOCs, as well as prior orders issued by U.S. EPA, pertain to the same Site. In reaching this conclusion, the court rejected the Bankerts' request to certify questions about the state statute of limitations to the Indiana Supreme Court for decision.
Finally, the court found that the Bankerts' insurer was not entitled to summary judgment with respect to its coverge obligations for the Third Site. The insurer previously had won a defense to coverage with respect to a different Enviro-Chem site, and had sought to bar coverage here on claim preclusion or issue preclusion grounds. The court found that the facts concerning the Third Site were distinct so that the trial court needed to separately consider the insurer's coverage obligations at that site.
The Bernstein decision resulted in several important CERCLA and related holdings that, unless modified upon rehearing or en banc or by the Supreme Court, will govern environmental litigation within the Seventh Circuit. Those holdings include:
- A PRP who qualifies for a CERCLA § 9613(f) contribution action must use that cause of action to recover costs from other PRPs, and cannot use a CERCLA § 9607 cost recovery action.
- Each government settlement agreement at a single site invokes a distinct payment obligation, each of which can be the basis for a CERCLA cause of action and, therefore, a new running of the applicable statute of limitations.
- A PRP's right to bring a CERCLA § 9613(f)(3)(B) contribution action in response to its settlement with the government is not triggered unless and until the government issues a final release of the PRP's liability, typically upon acceptance of all work under the settlement agreement. Until that time, a PRP seeking to recover costs of response can only proceed under § 9607.
- A PRP who executed a settlement with the government and who was "compelled" to pay response costs is entitled to proceed under § 9607; however, that plaintiff PRP will not be able to impose joint and several liability if the defendant PRPR can prove a reasonable basis for apportioning liability.
Are Climate Change Tort Actions Dead? What’s Next After Supreme Court Decision in AEP v. Connecticut?
Jenner & Block's Climate & Clean Technology Law Practice invites you to a webinar presentation exploring the legal and practical ramifications of the U.S. Supreme Court's June 20, 2011 decision in American Electric Power Co. v. Connecticut, No. 10-174. The Court's decision resulted in the dismissal of the toxic tort lawsuit brought by several Northeastern states, seeking to recover damages resulting from alleged climate change impacts from power plant greenhouse gas emissions. The webinar will specifically focus on the viability of state common law nuisance actions in the wake of the AEP decision.
This one-hour webinar is presented by Jenner & Block Partners Gabrielle Sigel and Steven Siros on Tuesday, August 9, 2011, at 12:00 CST. 1.0 hour of Illinois MCLE credit is requested.
To register for this free webinar, please send an email to Angelique Hardy Heinz at mailto:AHeinz@jenner.com. To participate in the webinar, you must be able to access WebExTM. A link will be provided upon registering for the course.
Jenner & Block LLP has been certified by the MCLE Board of the Supreme Court of Illinois as an Accredited Provider. Credit for additional jurisdictions may be available upon request.
Gabrielle Sigel and William Kaplowitz, attorneys in Jenner & Block's Environmental, Energy & Natural Resources Law Practice, recently posted to Jenner & Block's Climate Change Update Resource Center their May 2011 Update of Climate Change developments. Of note in this month's update are bipartisan bills promoting electric vehicles, the Obama administration's first purchase of electric vehicles, and new fuel efficiency stickers for new vehicles beginning in model year 2013 that will be able compare the efficiency of electric vehicles to those that run on gas through use of a measure called miles per gallon equivalent (mpge).
Click here to read the May 2011 Climate Change Update.
Gabrielle Sigel to Speak At Chicago Bar Association Environmental Law Committee Regarding Chrome Regulation
On May 3, 2011, Gabrielle Sigel, a partner in Jenner & Block's Environmental Law Practice, shall provide a presentation to the Environmental Law Committee of the Chicago Bar Association addressing the overlap in OSHA and EPA regulation regarding chrome use in the workplace. Both OSHA and EPA have detailed regulations regarding chrome emissions in the workplace, employee exposures, and work practices. Ms. Sigel will explore this area of regulation to demonstrate the extent to which these regulations overlap and present significant compliance requirements. The Chicago Bar Association committee meeting will be hosted by Jenner & Block. Further details regarding attendance are provided in the attached announcement.
Gabrielle Sigel is a founding Partner of the Firm’s Environmental Law Practice, Co-Chair of Jenner & Block’s Climate and Clean Technology Law Practice, and a member of the Environmental Litigation Practice. Ms. Sigel regularly represents clients in workplace safety and health enforcement and compliance matters and in complex environmental statutory, common law, Superfund enforcement, toxic tort, and cost recovery actions.