Recent DOJ Directive Marks Continuing Effort to Curb Availability of Supplemental Environmental Projects in Civil Environmental Settlements
On August 21, 2019, the Department of Justice issue a new memorandum reducing state and local governments’ ability to enter into settlement agreements that require the completion of supplemental environmental projects (SEPs) as compensation for alleged environmental violations. While impactful in its own right, the DOJ memo can be viewed as a continuation of an over two-year long effort by the DOJ to reduce the general availability of SEPs in the settlement of civil environmental cases.
As defined by the EPA, “SEPs are projects or activities that go beyond what could legally be required in order for the defendant to return to compliance, and secure environmental and/or public health benefits in addition to those achieved by compliance with applicable laws.” Private parties or municipalities may offer to complete SEPs as part of a settlement with EPA or other environmental regulators. By doing so, the alleged violator effectively replaces a part or all of the penalty owed for an environmental violation with the commitment to develop an environmentally beneficial project.
Despite the widespread and longstanding use of SEPs in settlement agreements, recent actions by the DOJ demonstrate a clear effort by the Department to reduce the use of SEPs in the settlement of alleged environmental violations.
Available Company Defenses to Climate Change Shareholder Activism: Trends in Climate Change Litigation, Part 5
As noted in Jenner & Block’s prior blog post, Shareholder Activism: Trends in Climate Change Litigation, Part 4, an emerging issue for public companies in high greenhouse gas (“GHG”) emitting industries is increased pressure from environmentally focused “activist shareholders.” These shareholders often seek to leverage their ownership shares to influence companies into taking action to decrease GHG emissions and/or increase public disclosure of such emissions. These efforts may be undertaken through negotiations with company management or through the introduction of specific shareholder proposals and proxy materials to be presented and voted on at annual shareholder meetings.
Several recent actions taken by the SEC may now help shield public companies from certain attempts by shareholders to introduce climate change related proposals for consideration at shareholder meetings. Under SEC rule 14a-8(i)(7), public companies may exclude from shareholders’ voting ballots any proposals which seek to “micromanage” the company’s ordinary business operations. In recent months, the SEC has asserted that rule 14a-8(i)(7) may be utilized by companies to block certain types of climate change related proposals. The agency has articulated this position by issuing “no-action” letters to public companies seeking to block climate-change proposals from their shareholders. In effect, these letters act as an assurance that the SEC will not recommend enforcement action against the companies for blocking the respective proposals because the agency agrees that the proposal falls under the purview of rule 14a-8(i)(7). However, the SEC has, in a few instances, refused to issue “no-action” letters to companies seeking to block shareholder climate change proposals.
Whether a shareholder’s climate change proposal is excludable under rule 14a-8(i)(7) therefore appears to be a case-by-case determination which depends on the specific demands of a proposal. As a general rule, the SEC has found that proposals which only seek greater disclosure of a company’s GHG emissions cannot be excluded under rule 14a-8(i)(7), but proposals which impose GHG emission reduction targets on the company or require specific methods for reporting or calculating GHGs may be excluded under rule 14a-8(i)(7). A few instructive examples of these general conclusions are provided below:
- On February 14, 2019, the SEC issued a no-action letter to J.B. Hunt Transport Services, Inc. approving the company’s request to block a shareholder proposal that, if implemented, would require the company to adopt quantitative targets for reducing GHG emissions and issue a report demonstrating its progress towards achieving these targets. The SEC found that the proposal sought to micromanage the business by probing into complex matters that were better left to the informed judgment of management.
- On March 4, 2019, the SEC refused to issue a no-action letter to Anadarko Petroleum Corporation after the company sought to block a proposal requesting that the company describe if, and how, it planned to reduce its total contribution to climate change to fall in line with the global temperature objectives of Paris Agreement.
- On April 2, 2019, the SEC issued a no-action letter to ExxonMobil which affirmed that the company could exclude a shareholder proposal which would require the company to adopt and disclose certain GHG emission reduction targets. The SEC noted that the proposal sought to replace the ongoing judgments of the company’s management with “specific methods” for implementing complex policies.
Of course, the threat of potential governmental enforcement actions is only one reason why a company may hesitate to block shareholder proposals. Beyond the business considerations of such a decision, public companies may also need to consider whether adopting certain types of shareholder proposals—particularly those calling for increased disclosure and transparency of GHG emissions—may be beneficial to protect the company from the risk of future lawsuits by the company’s shareholders.
On August 28, 2019, EPA issued a proposed rule titled Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review (the “Proposed Rule”). The Proposed Rule, if adopted, would rescind certain parts of the New Source Performance Standards (“NSPS”) related to methane and volatile organic compounds (“VOCs”) in the oil and gas industry.
First, EPA is proposing to redefine the operations included in the NSPS source category for the oil and gas industry. The original source category listing for the oil and gas industry, issued in 1979, included the production and processing segments of the industry. In 2012 and 2016, EPA expanded the oil and gas industry source category to include the transmission and storage segment of that industry. The Proposed Rule would remove sources in the transmission and storage segment from the oil and natural gas source category and would rescind the methane and VOC emission limits, adopted in 2012 and 2016, which currently apply to those sources.
Second, EPA is proposing to rescind emissions limits for methane (but keep limits for VOCs) in the production and processing segments of the oil and gas industry.
How Low Will The Regulators Go: California Sets New PFOA/PFOS Drinking Water Notification Guidelines
On August 23, 2019, California’s State Water Resources Control Board (Water Board) announced updated guidelines for local water agencies with respect to perfluorooactanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) in drinking water. The updated guidelines lower the notification levels from 14 parts per trillion (ppt) to 5.1 ppt for PFOA and from 13 ppt to 6.5 ppt for PFOS. Public water supply systems are required to report exceedances of these guidelines to their governing boards and the Water Board.
According to the Water Board, these new guidelines were predicated on updated health recommendations issued by California’s Office of Environmental Health Hazard Assessment (OEHHA), which published its own recommended notification levels for PFOA and PFOS, albeit at much lower levels. In a recently issued report, OEHHA recommended that the notification levels be set at 0.1 ppt for PFOA and 0.4 ppt for PFOS. However, OEHHA recognized that these levels are lower than what can reasonably be detected in the laboratory and therefore recommended that the Water Board set the notification levels at the lowest reliable detection levels.
In addition to the updated notification levels, the Water Board requested that OEHHA proceed to develop public health goals for both PFOA and PFOS, which is the next step in the process of establishing maximum contaminant levels for these contaminants in drinking water. We will continue to monitor and provide updates with respect to these regulatory efforts.
Exploring the E-Suite with Elizabeth Anderson, Ph.D., Fellow ATS, Chief Science Officer and Senior Fellow, Exponent, Inc.; formerly, Carcinogen Assessment Group and Office of Health and Environmental Assessment, U.S. EPA
Exploring the E-Suite with Elizabeth Anderson, Ph.D., Fellow ATS, Chief Science Officer and Senior Fellow, Exponent, Inc.; formerly, Carcinogen Assessment Group and Office of Health and Environmental Assessment, U.S. EPA
- I understand that you worked for U.S. EPA when it was first started as a federal agency in the early 1970s. What was your role at the “new” U.S. EPA?
I led the health sciences assessment work for the first 14 years after U.S. EPA was formed in December 1970. At the time, U.S. EPA was a very small agency. I was the only health scientist in an eight-person Office of Technical Analysis, reporting directly to U.S. EPA’s first Administrator, Bill Ruckelshaus. He is an extraordinary person—a terrific and committed leader, who also knew how to make hard work fun. The Administrator asked me to lead an intra-agency committee to write a cancer policy to address the zero risk tolerance expectation for substances with some evidence, often conflicting, of carcinogenicity, as indicated by tumors in animals or humans. Another challenge was that substances could be ubiquitous or important to our society. We knew a “zero tolerance” policy for all possible carcinogens would be unworkable, so my committee reported out a process rather than a cancer policy. That process was the first use of risk assessment to organize what is known and unknown about the likelihood that exposure to a particular agent might cause illness. On the assumption the agent might cause illness, the next step is to define what levels of risk and exposure would be acceptable and protective of public health. The concept of risk acceptance was novel at the time and was introduced in a social and political climate aimed at seeking the ideal, i.e., zero risk.
My office at U.S. EPA conducted and I co-authored more than 150 risk assessments between 1976 and 1983 as a basis for defining major regulatory policy. The National Academy of Sciences published its endorsement of this risk assessment process in 1983. The Academy’s report, referred to as “The Red Book,” inspired national and international adoption of the U.S. EPA’s approach to risk assessment started by my intra-agency committee. I led the effort to expand the health assessment program, which resulted in establishing the central risk assessment office for the Agency—the Office of Health and Environmental Assessment. This office reported directly to the Administrator, who granted us wide latitude to expeditiously conduct our assessments.
- What was your professional and academic background leading to your involvement in health risk assessment?
My academic background is in synthetic organic chemistry, the chemistry of making organic molecules, amongst other applications, to be biologically active. I was pre-med at the College of William and Mary, but I was strongly discouraged from pursuing medical school “because I would be taking the place of a man” (a quote from the Chairman of the Chemistry Department). Instead, I was granted a fellowship at the University of Virginia to pursue a master’s degree in synthetic organic chemistry. Next, I applied for a unique fellowship being granted by the U.S. Department of Defense and completed my Ph.D. work in synthetic organic chemistry. During those early years of U.S. EPA, my degree and training best fit the Agency’s needs. There were no degrees in toxicology, relevant applications in epidemiology were just emerging, and mechanism of action had received little attention. I was fortunate to be in the right place at the right time.
- What was it like to be part of the start of a new federal agency?
Most of all, it was challenging. Following the civil rights movement, the anti-Vietnam war movement, and 20 million people marching on the first Earth Day, the spirit of the time was that significant change can happen; every move at EPA was front-page news. We all felt a sense of urgency to make a difference and establish scientific credibility for all decisions that the Agency had to make. U.S. EPA inherited a rapidly cascading series of enabling legislation starting with the Clean Air Act in December of 1970, followed by amendments to the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide, and Rodenticide Act; Radiation Authorities; the Drinking Water Act; “Superfund” (CERCLA); and the Resource Conservation and Recovery Act (RCRA). All compelled the Agency to be protective of public health. Implementing this Congressional directive was left to the Agency and, for our part, this meant meeting strict deadlines and establishing scientific foundations that defined protection and that could survive challenges from Congress and the scientific, private, public, and legal communities.
At a very young age, many of us at U.S. EPA inherited a great deal of responsibility. New areas of complexity seemed to develop on a daily basis. Looking back, a culture of committed, young professionals worked hard and achieved a great deal. We were inspired by the excitement and challenge of those times. Many of us have remained friends and colleagues until the present day. Some of us are still involved, as board members of the U.S. EPA Alumni Association.
- What were some of the accomplishments of which you were most proud that came out of your work for U.S. EPA?
I am proud of many things, but I am most proud of my role in co-authoring the first guidelines to establish risk assessment and risk management as the basis for setting public policy to protect public health and having the opportunity to found and direct U.S. EPA’s first health assessment offices, the Carcinogen Assessment Group, and the expanded Office of Health Environmental Assessment. In addition, I had the opportunity to found and direct the Agency’s expansion of health topics to include reproductive risk assessment, mutagen risk assessment, and exposure assessment groups; these offices conducted all risk assessments for the Agency’s program offices for many years.
I was fortunate to be a part of establishing the scholarship in this rapidly developing and complex field of health risk assessment. A small number of us founded the Society for Risk Analysis, a focal point for sharing scientific developments from all sectors, including engineering and the social sciences. I served as one of the early Presidents and, for 10 years, was Editor-in-Chief of the Society’s flagship journal, Risk Analysis: An International Journal. In addition, as U.S. EPA’s representative, I had the privilege of participating in the worldwide application of risk assessment first in Europe through the World Health Organization and subsequently through the Pan American Health Organization and other organizations.
- After you left U.S. EPA, you have had several professional engagements. Can you summarize those for us?
After spending 14 years being a part of U.S. EPA’s founding, I entered the private sector, initially as President and CEO of the first private health and environmental assessment consulting firm, Clement Associates. In addition to work for private clients, U.S. EPA contracted with me to oversee and direct the first risk assessments for all of its Superfund sites, as did the Agency for Toxic Substances and Disease Registry to direct and write the first Toxicity Profiles. Later, I founded my own company, Sciences International, and directed it for 13 years, during which we addressed a wide variety of interesting and challenging issues. Subsequently, Exponent asked me to serve as Vice President for Health Sciences, a post I served in for 10 years, then as Chief Science Officer. More recently, I am honored to accept the Exponent designation of Senior Fellow, a rare recognition by the Company. Presently, I continue my work in the field of health risk assessment. I know that the framework and process we created in the early years made it possible to identify gaps in knowledge and point to ways for improving the foundations for health risk assessment.
- What are the emerging policy issues in the area of human health risk assessment?
Without a doubt, the need to sensibly apply the science we know to separate the important from the unimportant issues. Often, I feel that we lose sight of the fact that health risk assessment has achieved endorsement worldwide as the premier way to address the complexity of issues involved in defining public health protection. Also, the outcomes of risk assessment now have challenging new applications, e.g., in toxic tort litigation or world trade decisions.
In the policy area, one important emerging issue is the use of health risk assessment to “prove safety.” Adopting ever-diminishing levels of possible protection to achieve this goal effectively creates a “zero tolerance” policy, the very policy that would have defeated U.S. EPA at its inception. I believe that little is gained by these controversial policies that create debate for years; under these approaches we can lose sight of what is important. For example, important EPA risk assessment documents may now take years to become final because of endless debates in areas of scientific uncertainty where societal impacts can be enormous but risk reduction uncertain and marginal. We accept risk in every other part of our society, so it is unrealistic to apply a zero-risk policy to our environmental decisions.
Secondly, I feel that it is most unfortunate that the sciences so essential to public health understanding are often caught in agendas that constrain even the most objective review and use of our public health documents. There is no question that science has become politicized. I contend that U.S. EPA would have been lost without access to all scientists of importance to our decisions, regardless of who had funded their work.
Finally, I see an increasing lack of understanding of the difference between science as applied to public health protection—to preempt and prevent disease—and the science of establishing causality. It is critical to use honest science, regardless of the setting, to avoid mistakes. Distortion of scientific foundations and fact to achieve economic or political gain is deplorable and should be rejected.
- What do you enjoy most about your work in the field of human health risk assessment?
The endless challenges. Risk assessment demands that we honestly express what is known and unknown. Exploring the unknowns and narrowing our knowledge gaps are endlessly rewarding endeavors.
- What do you find to be the most challenging aspect of your work?
It is very difficult to find a single answer to this question. Exploring new science will always be at the top of the list. The greatest non-scientific challenge is the fact that not all are in engaged in finding the truth. Trying to explain the known scientific facts in situations involving exploitation of scientific unknowns or distortion, whether in the courtroom or as a part of political debate, is challenging. The climate created by the spirit of the ’60s was to seek the truth. We were all essentially on the same page; we shared common goals even as we debated the best methods of scientific approach. Today, goals often do not converge; science in the age of polarization is challenging.
- What or who helped you succeed as a leader in the area of human health risk assessment?
I have been surrounded by thought leaders and gifted people throughout my career. The environmental movement attracted so many to the new U.S. EPA. One who contributed so much to my understanding was Dr. Roy Albert, the Deputy Director of the School of Environmental Medicine at NYU. He was blessed with an extraordinary intellect and excellent sense of balance. He was the outside Chair of our Carcinogen Assessment Group in the early years, a role that would not be possible in the bureaucracy today. And I must continue to give credit to U.S. EPA Administrator Ruckelshaus.
- What advice would you give a young person today who is considering starting out in your field?
Follow your dreams. Work is never work if you feel passionate about what you are doing. Achieve the best education you can get and keep your options open. You may need to help create your own opportunity. Have confidence in your capabilities to achieve your goals and set high ones.
California’s Office of Environmental Health Hazard Assessment (“OEHHA”) recently adopted amendments to California’s Proposition 65 regulations regarding appropriate warnings for rental vehicles. More specifically, OEHHA’s amendments add new Sections 25607.36 and 25607.37 to Article 6 that provide more specificity regarding the content of safe harbor warnings for rental vehicle exposures, and the corresponding methods for providing those warnings that are specific and appropriate for rental-car businesses.
Proposition 65 regulations currently provide guidance concerning safe harbor warning methods and content warnings for vehicle exposures. Under the vehicle exposure regulation set forth at Section 25607.16, warnings must be provided as follows:
- The warning is printed in the owner’s manual for the passenger vehicle or off-highway motor vehicle, in no smaller than 12-point type enclosed in a box printed or affixed to the inside or outside of the front or back cover of the manual or on the first page of the text; and
- The warning is provided on a label attached to the front window on the driver’s side of the passenger vehicle or off-highway motor vehicle. If the vehicle does not have a driver’s side window, the warning may be provided on a hang tag which is hung from the rear view mirror. If the vehicle does not have a driver’s side window or rear view mirror, the warning may be placed in another prominent location. The label need not be permanently affixed.
Although OEHHA continues to state that the safe harbor warning methods in Sections 25607.16 are appropriate for exposures to listed chemicals from vehicles purchased by consumers, concerns were raised that compliance with Section 25607.16 for rental vehicles could pose public safety concerns. According to OEHHA, when placed and maintained on the driver’s side window, the vehicle exposure tailored warning has the potential to flag the vehicle as a rental vehicle, which increases the risk that the vehicle may be targeted by thieves believing that the vehicles contains valuables.
Exploring the E-Suite with Dr. Shalini Vajjhala, Founder and CEO, re:focus partners (San Diego, CA), and former Deputy Assistant Administrator in the Office of International & Tribal Affairs at the US EPA.
Exploring the E-Suite with Dr. Shalini Vajjhala, Founder and CEO, re:focus partners (San Diego, CA), and former Deputy Assistant Administrator in the Office of International & Tribal Affairs at the US EPA.
- Tell us about re:focus partners, including what the organization does and your role.
re:focus is a design firm that specializes in developing resilient infrastructure solutions for cities and communities around the world and integrating project finance into the design process. Our team brings together expertise in policy, engineering, and risk management to craft integrated projects and develop new public-private partnerships. The goal of every re:focus project is to better align public funds and leverage greater private investment to protect and improve the lives of vulnerable communities.
As Founder and CEO, my role involves setting the strategic direction of the organization and putting together our major initiatives and partnerships. Like most small organizations, everyone on our team does a little bit of everything, and on the day-to-day level, I usually have my sleeves rolled up on various project management, design, and analysis tasks and pieces of writing.
- What is your professional background that led you to become involved in the energy and environmental fields?
I am an architect first and foremost, and I have always loved the field of green design. I went on to do graduate work in engineering and public policy (also at Carnegie Mellon University), which widened my view of the many ways to engage in the energy and environmental fields. My research focused on how community mapping could inform environmental decision-making. When I finished my PhD in 2005, I went on to join Resources for the Future, an economics think-tank in Washington, DC, as one of a handful of non-economists in the organization. Being more of a “methods” rather than domain-specific researcher gave me tremendous freedom to work on issues from infrastructure siting to environmental justice and climate change adaptation, which all have important spatial dimensions and community engagement at their core.
In early 2009, I joined the Obama Administration and spent a few months at the White House Council on Environmental Quality before moving to the US EPA’s Office of International and Tribal Affairs. In my time in the Administration, I worked on a huge range of issues, but one of the common threads was pulling together interesting public-private partnerships to make progress where public-sector resources alone were insufficient.
I stepped down from my position at the EPA in 2012, just before Hurricane Sandy hit the eastern seaboard, and was urged by our various partners to continue the green infrastructure and resilience work I had started at EPA. That’s how re:focus came to be. In hindsight, I feel tremendously fortunate to have had the chance to focus on interesting problems and follow those problems into new career opportunities that allowed me to tackle the same challenges from very different vantage points, from research to policy-making to entrepreneurship.
- What do you think are the emerging issues in the energy and environmental fields, especially your work in sustainable infrastructure?
We all recognize when infrastructure fails, but we rarely invest in new systems to prevent disaster and protect communities. I think the biggest emerging issue in the energy and environmental field is how we create robust and resilient infrastructure systems of all kinds and recognize the value of the “avoided losses” or the successes where something doesn’t happen—a storm hits, but a community isn’t devastated. Just as with preventative healthcare, valuing and capturing the value of these kinds of investments is going to be essential if we are going to successfully transition to more resilient communities and economies over the coming decade.
- What aspects of working in the energy and environmental fields have you enjoyed most?
My favorite part of working in a field that is so broad is learning from the experiences and perspectives of colleagues from very different backgrounds and disciplines, and finding new lenses through which to see old and stubborn problems.
- What do you find are some of the most challenging aspects of your work in the energy and environmental fields?
Change is hard. Change in the public sector is even harder. One of the best strategies I have found to making real and persistent change is to gradually create space for something new by starting where an existing system is failing. It is much easier to talk someone from a sinking ship onto a lifeboat than it is to get someone to shift course if they don’t know their boat is taking on water. Too often we cling to a system that we know isn’t working for us today to avoid the unfamiliar tomorrow. Finding gentle ways to bring up existing problems and look for better solutions is the most reliable approach I have found to make something new seem like the preferred alternative to the status quo.
One important thing I try to avoid is making a future problem or benefit more important than what is happening now. Lots of experts from behavioral economics to psychology know that people everywhere struggle to make decisions that have benefits in the distant future. Instead, we look for where stakeholders in a system are losing money or value today—for example, talking about the costs of current local flooding instead of only talking about future climate changes—since these same systems are likely to be the first to fail or worst off in future.
- How did you make the transition from several high-profile energy and environmental policy positions in Washington, DC to becoming a sustainable-infrastructure startup founder?
I launched re:focus in 2012 after spending several years in multiple positions at CEQ and EPA. My roles at EPA gave me the opportunity to work with many incredibly dedicated civil servants across the federal government. One of the initiatives that I created and that our team at the Office of International and Tribal Affairs was instrumental in developing was the US-Brazil Joint Initiative on Urban Sustainability (JIUS). The program was an experiment to see how government agencies could build new public-private partnerships to leverage funding for green infrastructure. Based on its early success in bringing together non-traditional partners, it quickly grew into a binational presidential initiative, announced by President Obama and Brazilian President Dilma Rousseff, to catalyze investment in sustainability in cities around the world. This collaboration brought together federal, state and local government officials with a whole bunch of unconventional private sector companies to find new ways to develop and finance green infrastructure in the cities of Rio de Janeiro, Brazil and Philadelphia, PA. Despite their many differences, these two cities still face many similar challenges when it comes to designing and financing new water, energy, and transportation systems. We turned the role of government on its head and found new ways for government agencies to tackle age-old problems. For example, in Rio, we explored how the local civil defense authorities could help fund water infrastructure in slums to reduce landslide risks and save money in their own disaster response budget.
Thanks to the leadership of both of these cities, the lessons from the JIUS (pronounced: juice) were successfully highlighted at the UN Conference on Sustainable Development or Rio+20 in June 2012. Through the JIUS, it became clear that we were playing a unique role in designing and brokering new types of public-private partnerships for sustainable infrastructure, and re:focus was born to continue this unusual work.
Because I got nudged (by our many philanthropic, NGO, and corporate partners) into starting a social business to continue work that I was already doing, the transition to entrepreneurship was a bit more natural than it might have been otherwise.
- As a former policymaker turned startup founder that operates in the sustainable infrastructure space, what can today’s policymakers learn from your challenges and successes?
I love this question. It’s something we think (and write!) a lot about, and most of our team has worked inside government at some point. We work hard to remember the constraints we faced and the things that were barriers for us when we were in their shoes. We also make an effort to share where and when we get stuck so our government collaborators can see things from “the other side.” As one example, over the past two years we’ve dedicated a significant amount of time to tackling procurement barriers to help both local governments and innovative companies struggling to find new solutions for their highest-priority challenges.
The most important lessons we’ve learned are that designing major infrastructure projects takes time and investing in predevelopment (all the things you need to do before construction) is essential, so you don’t just build another version of what you had, but you genuinely get to a solution that will serve your community well into the future.
- What and/or who have helped you succeed as a startup founder?
I have to credit my colleagues for every success we’ve had at re:focus. We are a tiny but mighty team, and working with good people who can laugh and persevere together through the daily ups and downs of any start-up is what makes the work worth doing. A couple of years ago, we realized that one of our major initiatives was worth spinning out into a sister company. My colleagues Elle Hempen and Ellory Monks launched The Atlas Marketplace and did an amazing job turning a spreadsheet into a social business to help cities find, source, and procure innovative solutions for everything from stormwater management to urban mobility systems. Having other female founders to celebrate the wins with and empathize when things are bumpy is one of my greatest sources of support.
- What advice would you give a young person today who is considering starting out in the energy and environmental fields?
Follow interesting problems. Careers are no longer linear progressions within a single firm. Many of the biggest opportunities in energy, environment and sustainability are at the “seams” of existing sectors and fields. At re:focus we work hard to serve as ambassadors between traditional silos. Often our work involves finding other connectors and helping everyone see a problem in the same way. For example, in talking with both transportation and water experts about greening urban stormwater systems, we try to find simple illustrations—like turning the city from a funnel into a sponge—so we avoid jargon and create the space for collaborative problem solving. Often our most successful work will involve someone saying, “Well, we've never done this before, but it looks like a little bit of x and y with a dash of z thrown in.” No one can be an expert in everything but even someone just starting out can learn how to break through jargon, learn from lots of different kinds of people, and see problems from different angles. I think the energy and environment fields offer some of the most exciting opportunities to make real and meaningful change over the coming years, and I’m incredibly optimistic about our next generation of innovators!Dr. Vajjhala was interviewed by Alexander J. Bandza, Associate, Energy and Environmental and Workplace Health and Safety Law Practices, Jenner & Block LLP
Exploring the E-Suite with Jonah Greenberger, Co-founder and President, Bright, Inc. (San Francisco, CA, and Mexico City, Mexico)
Exploring the E-Suite with Jonah Greenberger, Co-founder and President, Bright, Inc. (San Francisco, CA, and Mexico City, Mexico)
- Tell us about Bright, including what the organization does and your role.
Bright is the leading rooftop solar company in Mexico. We provide the financing and software that enable thousands of ambassadors to offer cheaper electricity to millions of homes, at no upfront cost, and we work with our network of hundreds of local installers and distributors to satisfy the resulting demand. Our first market is Mexico, which has more sun, higher electricity rates, and lower labor costs than the US. Bright's investors include First Round Capital, Y Combinator, and other top Silicon Valley firms.
- What is your professional background that led you to become involved in the clean energy and international fields?
I studied thermodynamics at Stanford and found energy fascinating - it felt like magic that a fuel could be converted into the motion of a car. I wanted to learn more and see how I could advance such a fascinating (and important) field.
- What do you think are the emerging issues in the energy field, especially clean energy and/or in the international context?
The largest topic is around how projects are allowed to use the existing grid, or the utility wires that move electricity from one place to another. It makes sense to only have one set of grids (vs telecom where you have many), but this means innovation is stifled unless there’s an easy way to access and use this grid.
- What aspects of working in the energy field have you enjoyed most?
I love how international energy is - everyone needs energy and it’s a national priority in almost every country to become more sustainable. Energy is an amazing way to see how the world works across borders.
- What do you find are some of the most challenging aspects of your work in the energy field?
Similar to what I mentioned earlier about connecting to the grid, innovation is largely at the whim of what the utilities will or have to allow in terms of connecting to the grid. Figuring out how to navigate these nuances is tricky but incredibly important.
- How did you make the transition from working for one of the world’s largest energy firms (Chevron) to becoming a clean energy startup founder?
Chevron taught me how the world consumes and produces energy and how to run a large international business. However, given how slow decisions were and career advancement as well, starting a company allowed me to release all of this pent up energy that I had to move fast and build.
- As a startup founder that operates in the clean energy and international spaces, what can policymakers learn from your challenges and successes?
One of the largest learnings we’ve had is that the platform has to be opened to create real innovation and impact. The internet, for instance, is a place anyone can build a webpage, create a company etc. But the grid in many countries is still the equivalent of if the internet required a DMV in person visit if you wanted to connect. Policy to free up the ability to connect to this platform could enable incredible value.
- What and/or who have helped you succeed as a clean energy startup founder?
YCombinator’s network has been incredibly helpful as has First Rounds to connect me to any expert I could need on any topic.
- What advice would you give a young person today who is considering starting out in the energy field?
I would advise to think about scalability from the start. Many energy projects are highly customized and so take forever and a vast amount of capital to have an impact. Solutions that will transform the way we use energy will be those that are far more standardized and can be repeated over and over again.
Mr. Greenberger was interviewed by Alexander J. Bandza, Associate, Energy and Environmental and Workplace Health and Safety Law Practices, Jenner & Block LLP
On May 13, 2019, U.S. EPA announced that it is adding seven sites to the Superfund National Priorities List (NPL), which includes the most serious contaminated sites in the country. EPA uses the NPL as a basis for prioritizing contaminated site cleanup funding and enforcement activities.
The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA a/k/a Superfund) requires EPA to create a list of national priorities among sites with known releases or threatened releases of hazardous substances throughout the United States, and update that list every year. EPA has established a Hazard Ranking System (HRS) screening tool, which EPA uses, along with public comments, to determine which contaminated sites should be on the NPL.
Under the Trump Administration, EPA has expressed a renewed focus on contaminated site cleanup, declaring the Superfund program to be a “cornerstone” of EPA’s core mission to protect human health and the environment. EPA Administrator Andrew Wheeler reiterated this focus when announcing the seven new NPL sites:
By adding these sites to the National Priorities List, we are taking action to clean up some of the nation’s most contaminated sites, protect the health of the local communities, and return the sites to safe and productive reuse. Our commitment to these communities is that sites on the National Priorities List will be a true national priority. We’ve elevated the Superfund program to a top priority, and in Fiscal Year 2018, EPA deleted all or part of 22 sites from the NPL, the largest number of deletions in one year since Fiscal Year 2005.
Currently, there are 1,344 NPL sites across the United States. The following sites are being added to the NPL per EPA’s announcement:
- Magna Metals in Cortlandt Manor, New York
- PROTECO in Peñuelas, Puerto Rico
- Shaffer Equipment/Arbuckle Creek Area in Minden, West Virginia
- Cliff Drive Groundwater Contamination in Logansport, Indiana
- McLouth Steel Corp in Trenton, Michigan
- Sporlan Valve Plant #1 in Washington, Missouri
- Copper Bluff Mine in Hoopa, California
Information about the NPL sites, including a map of all sites, is available on EPA’s website.
In the fourth installment of the Corporate Environmental Lawyer's discussion of emerging trends in Climate Change Litigation, we are highlighting the growing trend of Climate Change Shareholder Activism. While not active litigation, pressure from activist shareholders who wish to influence the environmental policy of public companies is another powerful force in the climate change litigation arena.
One notable example of this activism is the investor group Climate Action 100+. Climate Action 100+ is an investor organization consisting of over 300 institution investors who collectively manage more than $33 trillion in assets of some of the largest carbon emitting companies in the world. The organization’s stated objective is to “engag[e] companies on improving governance, curbing emissions and strengthening climate-related financial disclosures.”
While the organization was recently formed in 2017, Climate Action 100+ has already secured several victories in its attempt to influence public companies in carbon intensive industries.
- In late 2018, following negotiations with Climate Action 100+, Royal Dutch Shell announced new short-term carbon emission reduction goals in order to ensure the company stays in step with the global emissions goals set out in the Paris Accords. Shell has agreed to reduce its net emissions around 20% by 2035 and around 50% by 2015.
- In February 2019, Australia’s largest coal miner, Glencore, succumbed to shareholder pressure mounted by Climate Action 100+ and agreed to freeze its coal production at current levels. The company further announced it would take steps to increase disclosure of its emissions and environmental impacts.
Climate Change Lawsuits Brought by Coastal Municipalities and States Against the Fossil Fuel Industry: Trends in Climate Change Litigation, Part 3
In the third installment of Jenner & Block’s Corporate Environmental Lawyer's discussion of emerging trends in Climate Change Litigation, we are discussing a quickly proliferating form of litigation—lawsuits filed by U.S. states and municipalities against companies that operate in industry sectors which have historically had high levels of greenhouse gas emissions.
At present, the most common target for this litigation in the United States has been the oil and gas industry. In these cases, plaintiff cities or states will often bring suit against a large number of oil and gas companies as members of the collective industry. These claims are usually brought in state court, where the plaintiffs can take advantage of potentially favorable state common law. Using this strategy, plaintiffs have asserted claims against the fossil-fuel industry under state law theories such as nuisance, failure to warn of the known impacts of climate change, and unjust enrichment. Of course, as a counter to this strategy and in hopes of demonstrating preemption under the Clean Air Act, defendants will often look to remove climate change cases to federal court.
In order to satisfy Article III Standing requirements, Plaintiffs in these cases have generally been coastal communities which allege that they have suffered harm or are uniquely at risk of suffering harm from rising sea levels as a result of climate change.
Several examples of this ongoing litigation includes:
- County of San Mateo v. Chevron Corp. et al. (2018): claims brought by six California municipalities and counties against 37 fossil-fuel companies in California state court. The plaintiffs, alleging they will be damaged by the effects of climate change, brought a variety of claims under state common law including nuisance, negligence, failure to warn, and trespass. Following defendants’ removal of the case to federal court, plaintiffs successfully remanded back to state court on the grounds that their claims did not implicate a federal question or raise preemption issues. Defendants have filed an interlocutory appeal in the Ninth Circuit which is currently being briefed by the parties.
- City of Oakland v. BP p.l.c. et al. (2018): claims brought by the City of Oakland and San Francisco against fossil-fuel companies under California common and statutory law. Plaintiffs asserted that the industry’s GHG emissions amounted to a “public nuisance” under California law. However, unlike San Mateo, the defendants in City of Oakland were able to successfully remove and ultimately retain the matter in federal court. The Northern District of California court denied plaintiff’s motion to remand the case back to state court based on its finding that federal common law necessarily governed the nuisance claims. The district court subsequently dismissed the suits on the grounds that the plaintiffs’ claims raised a “Political Question” best addressed by the legislature as opposed to judicial branch. This dismissal has also been appealed to the Ninth Circuit.
- Rhode Island v. Chevron Corp. et al. (2018): The first such case to be brought by a U.S. State, Rhode Island asserted claims for nuisance, strict liability, failure to warn, design defect, trespass, impairment of public trust resources, and violations of the Environmental Rights Act against 21 fossil-fuel companies. Rhode Island’s lawsuit asserts that the state’s extensive coastline will be damaged through rising sea levels, increased frequency and severity of flooding, extreme precipitation events, and ocean warming and acidification. Defendants have removed the case to federal court, and the parties are currently briefing Rhode Island’s attempt to remand the case back to state court.
Exploring the E-Suite with Joel Brammeier, President and CEO, Alliance for the Great Lakes
- Tell us about Alliance for Great Lakes, including what the organization does and your role.
The Alliance drives the local, state and federal policy reforms and implementation necessary to create a healthy Great Lakes for all people and wildlife, forever. We do this by communicating our thought leadership on issues, building powerful networks of influencers, and educating and activating tens of thousands of volunteers, advocates and donors each year who bring their voices to our priorities.
As President and CEO of the Alliance, I concentrate on three principal responsibilities. The first is making sure that the Alliance is focused on the most significant issues affecting clean water in the Great Lakes. That involves a lot of listening, reading, and prioritizing our work. Second, I focus on the financial viability of the Alliance. Fundraising is is my time to listen to what is important to our supporters and communicate to them how their investment in clean water is impacting the Great Lakes. Finally, I work to support the core components of the Alliance—our staff, our volunteers, and the Board of Directors. Everyone needs to be fully engaged, informed, and moving forward to advance the Alliance’s mission.
- What is your professional background that you led you to become involved in policy issues concerning protection of fresh water assets and related environmental issues?
After undergrad at Valparaiso University and grad school at University of Michigan, I moved to Chicago in the late 1990s to follow the person who eventually became my spouse. At that time, I began volunteering with a number of NGOs in the Chicago area in order to build my network of relationships and assess how I could become professionally involved. I carried a deep values commitment to non-profit service, mostly due to observing the work of my parents as a teacher and member of the clergy. I had decided on focusing on environmental work in high school after a variety of positive outdoor experiences with my family. After about a year volunteering in various capacities in Chicago, an entry-level position opened up with a group called the Lake Michigan Federation. The combination of my personal value for the Great Lakes that was imprinted on me in childhood, along with my expertise from my education and volunteering, was enough to get me the job. Since that time, I have advanced through the growth and expansion of the organization to become the president of the Alliance for the Great Lakes.
- What do you think are the emerging policy issues regarding fresh water assets and the environment of the Great Lakes and how do you think they should be addressed?
It is still all about clean water, but in a much more inclusive and equitable way than is traditional for the mainstream environmental movement. The greatest emerging challenge is how to ensure Great Lakes water is protected and restored in a way that matters personally to all the people of the Great Lakes. For example, drinking water protection is commonly a top reason the public cites as a reason to protect the Great Lakes. The Great Lakes Water Resources Compact & Agreement is a monumental agreement among the states and provinces to ensure water is not diverted to far-flung locations, and that the natural hydrology of the lakes is protected. But this policy doesn’t ensure people can actually access safe, clean and affordable drinking water. It is not credible to say a large natural source of drinking water is truly protected if millions of people who rely on that water cannot safely or reliably use it. And this is today’s unfortunate reality, from manure contamination in northeast Wisconsin, to toxic algae in Lake Erie, to lead and PFAS contamination across the region. Often those harms are falling on people who are already suffering an outsize burden in other parts of their lives.
On specific issues, I think the greatest challenges are 1) changing how we grow food so the agricultural economy does not pollute our water 2) restoring the vital water infrastructure that is the basis of people’s health and the Great Lakes regional economy and 3) preventing the continued influx of invasive species that threaten to torpedo our way of life. Solving these challenges depends on a broad and engaged public that is motivated to action to protect the Great Lakes.
- What do you enjoy most about your work at the Alliance for the Great Lakes?
The people I work with, the ability to protect something that is personally important to me and the fact that clean water for all people and wildlife is a hard cause to argue against.
- What do you find to be the most challenging aspect of your work?
Environmental advocacy works on big problems with many deeply embedded interests and motivations. Changing that system takes time and can be frustrating. The flip side of that is when you are successful, you are changing a system in a lasting way and you know it will benefit people now and well into the future.
- What or who helped you succeed as a policy maker and advocate?
I’m not the kind of person who needs or wants to be in the spotlight taking credit, I just want to work smart and get the result I’m looking for. I’ve relied on so many people because this work is by nature collaborative and I would miss many if I named names. But I will mention one. Cameron Davis, who is now a commissioner at Chicago’s Metropolitan Water Reclamation District, gave me my first real shot at being an environmental professional. I’m sure I screwed up plenty while working for him, but he still let me follow him around and listen to him for years. This was fundamental to me learning how environmental policy change happens. I’m truly thankful for that time. I’ve had five Board of Directors chairs in my time leading the Alliance, without whom I never would have been able to figure out how to run an organization. School does not train you for that and board leadership is vital. The Alliance is fortunate to have a large and diverse base of financial supporters, and I reflect constantly on my obligation to them to make sure our work is addressing their desire for clean and safe water.
- Describe those projects as an environmental policy advocate of which you are the proudest.
I’ve done some transformative work in invasive species prevention where I can look back at policies and decisions by elected officials and know that I was one of the people at the center of making those things happen. If you get to be part of one thing like that in a lifetime, it’s pretty great. I’ve been a core part of, though definitely not the leader, of a successful movement to make the Great Lakes a national priority in the United States. I’m also quite proud of dramatically expanding the reach of my organization and becoming a leader in engaging people in advocacy, as public support is critical for success.
- What advice would you give a young person today who is considering starting out in your field?
Looking back, I realize today that I received a privileged opportunity when I joined the Lake Michigan Federation. It was a relatively small group rebounding from a tough time in the right way, and I was fortunate to get that job. Today, the green & blue movement is pervasive in our economy and culture in a way that just did not exist twenty years ago. Young professionals can and should seek out careers with environmental organizations, but also remember that there are opportunities to shape systems change throughout the private sector. They should ask their future bosses to communicate their personal vision for change. Look for somewhere in your work where you can take the lead on at least one thing that is important to you and your career. Listen to understand how environmental choices affect the daily lives of people and build your work around that knowledge. And consider spending some time in politics early on – understanding what motivates our decision makers is absolutely critical to devising strategies to make sure the right decisions are made.
In the second installation of Jenner & Block’s Corporate Environmental Lawyer's discussion of emerging trends in Climate Change Litigation, we are highlighting recent investigations brought by US state attorneys general against private companies for allegedly misleading the public and/or company shareholders regarding the potential climate impacts of their operations.
In recent years, several major state investigations were launched following investigative journalism reports of private companies’ failures to disclose the causes and effects of climate change. One such example is the Los Angeles Times 2015 exposé into Exxon Mobil Corp.’s historic in-house research on climate change.
Approximately one month after the publication of the Los Angeles Times’ article, the New York Attorney General subpoenaed Exxon, seeking documents related to the company’s research on the causes and effects of climate change; the integration of its research findings into business decisions; and the company's disclosures of this information to shareholders and the Securities and Exchange Commission. The attorney general’s investigation was grounded in New York's shareholder-protection statute, the Martin Act, as well as New York’s consumer protection and general business laws.
In 2016, New York’s investigation was publically supported by a coalition of top state enforcement officials from Vermont, Virginia, Massachusetts, Maryland, Connecticut, and the Virgin Islands, all of which agreed to share information and strategies in similar climate change investigations and future litigation. Exxon responded by filing its own lawsuit seeking to block New York and Massachusetts’ investigations.
After a three-year contentious investigation, the New York Attorney General's office sued Exxon on October 24, 2018, alleging that Exxon engaged in “a longstanding fraudulent scheme” to deceive investors by providing false and misleading information about the financial risks the company faced from its contributions to climate change.
Jenner & Block’s Corporate Environmental Lawyer will continue to update on this matter, as well as other important climate change litigation cases, as they unfold.
On Tuesday, April 16th, from 12:00 - 1:00 pm CST, Jenner & Block is hosting an interactive webinar that will discuss how environmental claims can arise in many different contexts and how high costs can be avoided. One way to manage the cost of environmental claims associated with historical operations is to pursue coverage under historical (and often pre-pollution exclusion) occurrence-based commercial general liability insurance policies. Our panelists will discuss the nuances and pitfalls that can arise in environmental insurance litigation and creative strategies to maximize recovery. In addition, companies facing environmental risks in their current operations or transactions can also manage environmental risk through a variety of current insurance products. Our panelists will identify current options available to manage environmental risks going forward and provide insight into the costs and benefits of those insurance products.
Jenner & Block Partners Allison Torrence and Brian Scarbrough will be panelists, along with Richard Reich, Managing Director at Aon Risk Services Central, Inc. Jenner & Block Associate Alex Bandza will moderate the webinar.
Please click here to RSVP for this webinar.
New Jersey continues to take an aggressive stance with respect to per- and polyfluoralkyl (PFAS) contamination. On March 25, 2019, the New Jersey Department of Environmental Protection (NJDEP) issued a “Statewide PFAS Directive Information Request and Notice to Insurers” to five major chemical companies notifying those companies that NJDEP believed them to be responsible for PFAS impacts to the air and waters of New Jersey. In addition to seeking recovery from these companies for past costs incurred by NJDEP to investigate and remediate PFAS impacts, the Directive also seeks to compel these companies to assume responsibility for ongoing remediation of drinking water systems throughout the state. The Directive further seeks information from these companies regarding historical PFAS manufacturing practices as well as information regarding these companies’ ongoing efforts to manufacture PFAS replacement chemicals.
Although environmental organizations have been quick to praise the NJDEP Directive, in reality, the state agency may have overstepped its authority. NJDEP has been quick to point out that the Directive is not a final agency action, formal enforcement order, or other final legal determination and therefore cannot be appealed or contested. Notwithstanding NJDEP’s efforts to insulate its Directive from immediate legal challenge, it will almost certainly draw strong industry challenges. For example, NJDEP’s efforts to obtain information regarding PFAS replacement chemicals may run afoul of the Toxic Substances Control Act and its efforts to compel reimbursement of past claims and/or the takeover of ongoing remedial actions will certainly be the subject of court challenges.
Continuing its full court PFAS press, on April 1, 2019, New Jersey unveiled a proposed drinking water standard of 14 parts per trillion (ppt) for PFOA and 13 ppt for PFOS. These proposed drinking water levels are significantly lower than the current U.S. EPA health advisory level of 70 ppt for combined PFOS/PFOA.
The term “climate change litigation” has become a shorthand for a wide range of different legal proceedings associated with addressing the environmental impacts of climate change. Plaintiffs in climate change lawsuits may include individuals, non-governmental organizations, private companies, state or local level governments, and even company shareholders who, through various legal theories, allege that they have been harmed or will suffer future harm as a direct result of the world’s changing climate. The targets of climate change litigation have included individual public and private companies, government bodies, and even entire industry groups. While there appears to be no shortage of plaintiffs, defendants, or legal theories emerging in climate change litigation, one clear trend is that the number of these lawsuits has grown dramatically in recent years. By one count, more than fifty climate change suits have been filed in the United States every year since 2009, with over one hundred suits being filed in both 2016 and 2017.
In light of the growing trend of climate change litigation, Jenner & Block’s Corporate Environmental Lawyer blog is starting a periodic blog update which will discuss the emerging trends and key cases in this litigation arena. In each update, our blog will focus on a sub-set of climate change cases and discuss recent decisions on the topic. In Part 1 of this series, we will be discussing Citizen-Initiated Litigation Against National Governments.
U.S. EPA continues to be on the hook for damages associated with the Gold King Mine located in San Juan County, Colorado. Several years ago, a contractor working on behalf of U.S. EPA to address environmental impacts associated with a closed gold mine, destroyed a plug holding water trapped inside of the mine, causing the release of approximately three million gallons of mine waste water into Cement Creek, which was a tributary of the Animas River. Although U.S. EPA took responsibility for the incident, it has refused to pay damages incurred as a result of he release, leading to lawsuits being filed by a variety of plaintiffs, including the states of Utah and New Mexico, the Navajo Nation, and affected individuals. Plaintiffs asserted a variety of claims, including claims under CERCLA, RCRA, CWA, and the Federal Tort Claims Act (FCTA). U.S. EPA filed a motion to dismiss, arguing among other things, that it was entitled to sovereign immunity for damages resulting from an ongoing cleanup effort.
On February 28, 2019, the federal district court in New Mexico rejected U.S. EPA’s claim that it was protected from CERCLA liability on sovereign immunity grounds, noting that at least three circuit courts have found that U.S. EPA can face liability under CERCLA where U. S. EPA’s actions in remediating a site are alleged to have caused releases of hazardous wastes. The court also found that plaintiffs’ allegations (which included Utah and New Mexico, as well as the Navajo Nation and individuals), if proven, would demonstrate U.S. EPA’s liability as an “arranger,” “operator,” and “transporter” of hazardous substances. Specifically, Plaintiffs stated claims for arranger liability because they "allege that EPA took intentional steps to dispose of a hazardous substance.” With respect to operator liability, the court noted that Plaintiffs “allege that EPA managed, directed, or conducted operations specifically related to the pollution, that is, operations having to do with the leakage or disposal of hazardous waste.” Finally, regarding transporter liability, Plaintiffs “allege that EPA took steps to drain the mine and treat the water at the site.”
With respect to the RCRA, CWA, and FCTA claims, the court concluded that there were disputed issues of fact that precluded the court from being able to grant dismissal of those claims. We will continue to provide updates on this proceeding.
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).
BACT to the Future: Enviros Petition for Review on Natural Gas Power Plant Air Permit, Saying Batteries Are “BACT” Under the Clean Air Act
Last week, the Center for Biological Diversity and other environmental groups petitioned the Ninth Circuit for review of EPA Region 9’s decision in December 2018 to issue a final prevention of significant deterioration (PSD) permit for the Palmdale Energy Project (Project), a gas-fired plant being developed in the city of Palmdale, CA. These environmental groups had previously but unsuccessfully challenged the permit in front of EPA’s Environmental Appeals Board (EAB), arguing that a new control technology configuration—namely, replacing the combined-cycle turbines’ duct burners with battery storage—should be used to satisfy EPA Region 9’s “Best Available Control Technology” (BACT) requirements under the Clean Air Act (CAA). The EAB denied the environmental groups’ appeal in October 2018. However, as the EAB explicitly recognized, “energy storage technology is a rapidly growing development in the electrical power supply sector,” and therefore the totality of the environmental groups’ efforts may spur additional consideration of battery storage as an option for facilities to meet their obligations under the CAA.
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.
What's in Your Baby Powder: NY Proposes Stringent New Disclosure Requirements on Cleaning and Personal Care Products
Last week, New York Governor Andrew Cuomo announced the Consumer Right to Know Act (“Act”) as part of his proposed executive budget. The Act would authorize the New York Department of Environmental Conservation, along with the New York Department of Health and the New York Department of State, to promulgate regulations requiring product manufacturers to disclose the presence of potentially hazardous substances on their product labeling. Among other things, the Act would require these agencies to assess the feasibility of on-package labeling; develop regulations establishing a labeling requirement for designated products; develop a list of more than 1,000 substances that must be labeled; and identify the types of consumer products that will be subject to these new labeling requirements. The Act would also extend the Department of Environmental Conservation’s disclosure requirements for household cleaning products to encompass all cleaning products sold in New York, and it would empower the Department of Health to require similar disclosures for personal care products like shampoo, deodorant, or baby powder. Needless to say, these disclosure requirements would be among the most stringent—if not the most stringent—in the United States.
Governor Cuomo’s announcement is available here. We will keep our readers updated on the progress of Governor Cuomo’s proposal.
Exploring the E-Suite with Sharon Neal, Assistant General Counsel-EHS Counsel,
Exelon BSC, Law Department
- How did you get involved in environmental law?
My interest in the environment began when I was young, around 10‑12 years old. I recall hearing my parents talk of their concerns about the environment and that triggered my curiosity. In college, I began by focusing on environmental science. In my sophomore year, a single paragraph in an environmental studies text discussed environmental law as an up-and-coming field for those with an interest in protecting the environment and shaping policy. From that moment, I decided to become an environmental lawyer. I graduated from Loyola University Chicago School of Law in 1988. I became a lawyer for the Illinois EPA in 1990, and I have been practicing environmental law ever since.
- What do you enjoy most about your work in environmental law?
I have never stopped finding my work in this field interesting and meaningful. No two days mirror one another. There is always something new to learn and do in light of the vast, ever changing nature of the environmental field. Even after more than 20 years with Exelon, my knowledge of the Company’s broad range of operations continues to grow. I have also so enjoyed and appreciated the many talented, intelligent and committed people with whom I have worked over my entire career, who have a wide range of expertise, such as in environmental science, investigation, remediation, nuclear operations, utility operations, regulatory and governmental affairs, and law. They have truly enriched my practice and life.
- What do you find to be the most challenging aspect of environmental law?
As a field, environmental law is especially challenging in light of the seemingly endless and changing laws, regulations, and other requirements, at the federal, state and local levels, with separate requirements for air, land, and water. It is challenging to stay current and to understand the legal implications for a large company that has many different types of complex operations. As with all fast-paced work, deadlines and competition for time are always a challenge. Also, unique to environmental law, is the deep intersection of science, law, and policy. The longer I have practiced, the more I have come to understand that you cannot possibly be an expert in all aspects of environmental law; there just too much to know and to know well. However, I do feel that what makes this field challenging also makes it continually interesting.
- What or who helped you succeed as an environmental lawyer?
I have had the privilege of working with so many exceptionally bright and experienced environmental specialists, consultants, attorneys (in-house and outside counsel) since my start in environmental law, as well as great, supportive managers and company leaders, here at Exelon, who prioritize environmental compliance and stewardship. That has made all the difference. Much of what I do is as part of a team made up of persons with diverse expertise. We work together and rely on each other to succeed.
- What do you think are the emerging issues in the field of environmental law?
Climate change will be at the heart of much of environmental law and policy going forward. There will be great emphasis on efforts to limit the operations that impact and create climate change, along with more and continuing efforts to reduce those impacts. There also will be a focus on responding and adapting to the effects that we already are seeing and that we will increasingly see in the future. We cannot overstate the significance of climate change in environmental issues going forward.
- Describe those projects as an environmental lawyer of which you are the proudest.
Looking at my career as a whole, what stands out initially is the work I did when I was with the Illinois EPA. That was my first environmental position, so my learning curve was steep. Yet, within those first couple of years, I was able to negotiate and write state laws and regulations. I appreciate that I had the opportunity to do such important work so early in my career.
I have worked on so many interesting matters at Exelon. The focus of my work has changed many times over the years, depending on regulatory and operational/business developments. Some of the most fascinating work has been supporting Exelon Nuclear, including on Clean Water Act issues. I have spent much time at our nuclear stations, including at the Quad Cities Generating Stations, which, among other things, operates a successful fish hatchery that feeds into the Mississippi River. I also had the opportunity to attend a U.S. Supreme Court argument concerning federal regulations under the Clean Water Act, which affected Exelon, among other regulated entities. I have supported Exelon on many interesting projects over the years focused on evaluating, preventing and mitigating environmental impacts. I have especially enjoyed learning about and supporting Exelon’s many environmental stewardship projects.
- Which community service or pro bono matters have been the most meaningful to you and why?
Exelon has an extensive pro bono and volunteer network, which provides opportunities for employees to participate in numerous activities that benefit a wide range of organizations and individuals in the communities that Exelon serves. At our annual Exelon Law Department All Hands clinics, attorneys and support staff work together to help many persons in single day’s event. At a recent clinic, we assisted seniors with planning and preparing important end of life documents. Last year’s clinic focused on providing support for those seeking immigration relief. Exelon’s Law Department holds such clinics annually in each of its four main cities, Chicago, Philadelphia, Baltimore and Washington D.C.
In the past year, I have also participated in some especially rewarding events and projects focused on introducing children and young adults to the field of law. A few of these events have supported “Just the Beginning”, a pipeline organization that motivates young people in economically challenged communities to become part of the legal profession and future leaders. I have also worked with young students in the “Lawyers in the Classroom” program, sponsored by the Constitutional Rights Foundation Chicago. It is a pleasure to teach and talk with the students in these programs and encourage them to see the legal profession as meaningful and attainable.
Also, in the past year, at the recommendation of a friend and colleague within the Exelon/EHS legal group, I became a board member of Thresholds, one of the oldest and largest Illinois organizations supporting persons with mental illnesses and substance use disorders. Thresholds provides a wide range of support—from care to employment to housing—for thousands of people in the broader Chicagoland community. I have been deeply gratified by the support I have received from Exelon and other friends, such as Jenner & Block, for my work on behalf of Thresholds.
- What advice would you give a young person today who is considering starting out in your field?
I am confident that environmental law, and the field of environmental studies, in general, will continue to be important, fascinating work. If you have the opportunity to work for the government, especially early in your career, take that opportunity. Government service is an incredible place to learn, not only substantive environmental law, but many aspects of how policy comes to be law, how regulations are drafted and laws are enacted, interagency relationships, and the needs and role of the regulated community. I am grateful to have had that opportunity at the start of my career.
Ms. Neal was interviewed by Gabrielle Sigel, Co-Chair, Environmental and Workplace Health and Safety Law Practice, Jenner & Block
In 2016, U.S. EPA established an advisory level of 70 parts per trillion (PPT) for combined perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)-- two of the more commonly found polyfluoroalkyl substances (PFAS). However, the Agency for Toxic Substances and Disease Registry (ATSDR) recently suggested that these advisory levels may not be stringent enough, releasing draft risk values earlier in 2018 that are significantly more conservative than the values relied upon by U.S. EPA in 2016. The ATSDR draft report identifies a minimal risk level for PFOA that equates to approximately 11 ppt and approximately seven ppt for PFOS.
The ATSDR draft report, the issuance of which the White House had sought to delay, has been subject to criticism by both sides of the spectrum, with some questioning the science behind the conclusions reached in the report, while others claim that the draft report doesn’t go far enough. The public comment period on the draft report closed on August 20, 2018 and the report has yet to be finalized.
However, in lieu of waiting for the report to be finalized and/or for U.S. EPA to take further action to revise its current health advisory level, several states have elected to move forward to establish their own regulatory limits for these chemicals. New Jersey and Vermont had taken the lead in adopting more stringent regulatory standards, with New Jersey adopting a 14 ppt limit for PFOA and Vermont adopting a 20 ppt limit for combined PFAS in drinking water. However, these levels were established prior to the release of the draft ATSDR report and a number of other states have since jumped on the regulatory bandwagon. For example, New York’s Drinking Water Quality Council recently recommended that New York adopt a 10 ppt limit for PFOA and PFOS. Michigan, which had adopted U.S. EPA’s recommended advisory level of 70 ppt, also is in the process of developing more stringent standards for PFAS in drinking water.
ATSDR has yet to release a time-line for finalizing its draft toxicological profile for PFAS and although U.S. EPA has announced that it intends to evaluate the need for a maximum contaminant level (MCL) for PFOA and PFOS, that is several years away. In the interim, it appears likely that individual states will continue to adopt their own individual regulatory levels for these chemicals in drinking water which will continue to result in a patchwork regulatory framework across the United States.
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: