Governor Newsom Vetoes PFAS Reporting Bill But Signs Into Law Legislation Banning PFAS in Cosmetics and Textiles
On September 29, 2022, Governor Gavin Newsom vetoed Assembly Bill No. 2247. The bill would have required manufacturers of per- and polyfluoroalkyl substances (PFAS) or products or product components containing intentionally added PFAS to register the PFAS or products or product components on a publicly accessible data collection interface, along with other information. According to the bill’s findings and declarations, the registration requirement would, among other things, provide California with timely information that would help the state characterize the threats of further PFAS contamination and human exposure in California and develop best practices for addressing the threats in an expeditious manner.
“Manufacturer” was defined to include, in addition to manufacturers, importers of PFAS or products or product components containing intentionally added PFAS, persons or entities whose names appear on product labels, and persons or entities for whom the PFAS or products or product components are manufactured or distributed. Registration would have been required on or before July 1, 2026, and on or before July 1 of each year thereafter. The registration requirement would not have applied to certain products regulated by federal law, such as drugs, medical devices and equipment, dietary supplements, and certain products intended for animals.
In Governor Newsom’s veto message, he explained that the bill may be premature given that EPA is currently undergoing rulemaking to require reporting of PFAS and noted cost concerns.
On the same day as the veto, Governor Newsom approved both Assembly Bill No. 2771, which bans intentionally added PFAS in cosmetic products, and Assembly Bill No. 1817, which bans regulated PFAS in textile articles.
Assembly Bill No. 2771 will, beginning January 1, 2025, prohibit the “manufacture, sale, delivery, holding, or offering for sale in commerce any cosmetic product that contains intentionally added” PFAS. Cal. Health & Safety Code § 108981.5. “Cosmetic product” is defined as “an article for retail sale or professional use intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance.” Id. § 108982(a). “Intentionally added PFAS” means either “PFAS that a manufacturer has intentionally added to a product and that have a functional or technical effect on the product” or “PFAS that are intentional breakdown products of an added chemical.” Id. § 108982(c).
Assembly Bill No. 1817 states that, “commencing January 1, 2025, no person shall manufacture, distribute, sell, or offer for sale in the state any new, not previously used, textile articles that contain regulated . . . PFAS.” Cal. Health & Safety Code § 108971(a)(1). “Textile” is defined as “any item made in whole or part from a natural, manmade, or synthetic fiber, yarn, or fabric,” but the definition does not include “single-use paper hygiene products.” Id. § 108970(h).
“Textile Articles” are defined as “textile goods of a type customarily and ordinarily used in households and businesses,” but there are various identified exemptions. Id. § 108970(i). Regulated PFAS means either “PFAS that a manufacturer has intentionally added to a product and that have a functional or technical effect in the product” or the presence of PFAS in a product or product component, measured in total organic fluorine, at or above 100 parts per million (commencing January 1, 2025) and 50 parts per million (commencing January 1, 2027). Id. § 108970(g).
The enacted bill further provides that manufacturers “shall use the least toxic alternative, including alternative design, when removing regulated . . . PFAS in textile articles.” Id. § 108971(b). Lastly, it requires manufacturers to provide persons that offer the product for sale or distribution in California a certificate of compliance and protects distributers or retailers (that are not also manufacturers) that rely in good faith on these certificates from being held in violation of the chapter. Id. § 108971(c), (d).
The prohibition against regulated PFAS in textile articles does not apply to outdoor apparel for severe wet conditions until January 1, 2028, but commencing January 1, 2025, such apparel must be accompanied by a disclosure statement “Made with PFAS chemicals,” including for online listings. Id. § 108971(a)(2).
These new laws now join other legal developments in California that aim to regulate PFAS in consumer products. For example, Assembly Bill No. 1200 and Assembly Bill No. 652, both approved on October 5, 2021, address PFAS in food packaging and cookware and children’s products, respectively. As states like California continue to move forward with legal developments aimed at addressing PFAS, so is the federal government. We will continue tracking PFAS developments in the Corporate Environmental Lawyer.
Jenner & Block Wishes Bon Voyage to Gay Sigel as She Starts Her Next Adventure with the City of Chicago
As Gay Sigel walked through the doors at One IBM Plaza in Chicago, fresh out of law school and ready to launch her career as an attorney at Jenner & Block, she could not have envisioned the tremendous impact she would have on her clients, her colleagues, and her community over the next 39 years. Gay started her legal career as a general litigator, but Gay and Bob Graham were quick to realize how the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was creating a new and exciting area of the law that was increasingly important for the firm’s clients: Environmental Law. Gay and Bob saw an opportunity to specialize in that area and founded Jenner & Block’s Environmental Health and Safety Practice. Gay has been an ever-present force in the EHS community ever since.
Over her 39-year career at Jenner & Block, Gay has worked on some of the most significant environmental cases in the country for clients ranging from global Fortune 50 corporations to environmental organizations to individuals. For more than a decade, she taught environmental law at Northwestern University, helping shape the next generation of environmental lawyers. She has worked on issues of global impact, like those affecting climate change, issues of local impact like those related to combined sewer overflows to the Chicago River, and issues of individual impact like those involving employee safety and health. No matter the subject, Gay has always been a tireless advocate for her clients. We often describe her as the Energizer Bunny of environmental lawyers: she is the hardest working attorney we have ever met.
Gay’s true passion is to make this world a better, more just place for others. So, throughout her career as an environmental, health, and safety lawyer, Gay has devoted her time, energy, and emotional resources to innumerable pro bono cases and charitable and advocacy organizations. Her pro bono work includes successfully protecting asylum applicants, defending criminal cases, asserting parental rights, and defending arts organizations in OSHA matters. Among her many civic endeavors, Gay was a founding member of the AIDS Legal Council of Chicago (n/k/a as the Legal Council for Health Justice); she was the Secretary and active member of the Board of Directors for the Chicago Foundation for Women; and she was on the Board of the New Israel Fund. Gay continues to promote justice wherever she sees injustice, including as an advocate for women’s rights, particularly for women’s reproductive rights.
In both her environmental, health, and safety practice as well as her pro bono and charitable work, Gay is a tremendous mentor to younger (and even older) attorneys. She is curious, committed, exacting, fearless, and demanding (though more of herself than of others). We all give Gay much credit for making us the lawyers we are today.
Gay is leaving Jenner & Block to embark on her next adventure. She is returning to public service as Assistant Corporation Counsel Supervisor with the City of Chicago's Department of Law where she will be focusing on environmental issues. The City and its residents will be well served as Gay will bring her vast experience and unparalleled energy to work tirelessly to protect the City and its environment. We will miss working with and learning from Gay on a daily basis, but we look forward to seeing the great things she will accomplish for the City of Chicago. We know we speak for the entire firm as we wish Gay bon voyage—we will miss you!
By Matthew G. Lawson
“When the wind of change blows, some people build walls, others build windmills.” While this ancient Chinese proverb most likely did not envision the construction of large-scale, offshore wind farms, its wisdom remains strikingly applicable to the United States’ energy and infrastructure policies in the 21st Century. At a time of growing concern over fossil fuel availability, climate change and energy grid security, the Corporate Environmental Lawyer is taking a moment during Earth Day 2022 to look towards our nation’s investment into improved infrastructure and clean, self-sustaining energy sources.
Undoubtably one of the largest recent, public investments in the United States’ infrastructure and energy future occurred on November 15, 2021, when President Biden signed into law the bipartisan and highly anticipated $1.2 trillion Infrastructure Investment and Jobs Act. According to the bill’s Summary, over the next five years, the legislation will provide significant infrastructure investments, including an additional $110 Billion in funding towards bridge and roadway repairs, along with approximately $30 Billion in public transportation. In addition, the bill allocates approximately $65 Billion to the Country’s power infrastructure, with nearly $29 billion dedicated solely to bolstering and protecting the electric grid. Finally, the bill includes $7.5 billion to deploy a national network of electric vehicle chargers across highway corridors throughout the United States.
Perhaps even more critical than the legislation’s investment is infrastructure spending, is its investment in future clean energy sources. Funds allocated through 2025 for clean energy projects include $84,000,000 for enhanced geothermal systems, $100,000,000 for wind energy, and $80,000,000 for solar energy. Moreover, the Biden Administration is betting big on “Clean hydrogen”—an emerging form of clean energy that utilizes surplus from other renewable sources to create additional power by splitting water molecules—by earmarking approximately $8 million in funding for investment in the technology.
Looking beyond the United States’ public infrastructure investments, private investment into clean-energy assets also skyrocketed in 2021, reaching a record $105 billion. This investment represents an 11% jump from 2020 and a 70% surge during the past five years, according to the Business Council for Sustainable Energy. Private backing into U.S. assets such as wind farms and solar plants represents about 14% of the $755 billion in global private investment made last year, including investment in the United States’ first commercial-scale offshore windfarm, the 30 MW Block Island Wind Farm, which is set to supply power to the energy grid by 2023. The project is the first of what the Department of Energy (DOE) anticipates being a major rollout of privately-funded offshore wind, including an estimated addition of more than 30 gigawatts of offshore wind power by the year 2030.
At a time when Americans are increasingly feeling pessimistic about the future of our Country, it is important to embrace the opportunity for bilateral agreement presented through future investments in the nation’s infrastructure and clean energy. Safe roads, reliable energy grids, clean air and new jobs are an area of common agreement between Americans at a time when such agreements appear to be increasingly rare. As a nation, we would do well to embrace our changing world and new challenges by investing in ourselves and our future.
On January 24, 2022, the U.S. Supreme Court agreed to hear a case on the scope and authority of the Clean Water Act (“CWA”). The Court granted certiorari in the case of Sackett v. U.S. Environmental Protection Agency, 19-35469, on appeal from the U. S. Court of Appeals for the Ninth Circuit.
The question presented to the Court is, seemingly, straightforward: “Whether the Ninth Circuit set forth the proper test for determining whether wetlands are 'waters of the United States' under the Clean Water Act, 33 U.S.C. § 1362(7).” But, this question has wide-reaching implications. The definition of “waters of the United States” (“WOTUS”) sets the jurisdictional limits of the CWA. Under the CWA, the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers (“Army Corps”) have the power to regulate, among other things, the discharge of pollutants to navigable water from a point source (33 U.S.C. § 1362(12)) and the discharge of dredged or fill material into navigable waters (33 U.S.C. § 1344). “Navigable waters” are defined in the CWA as “the waters of the United States, including the territorial seas.” 33 U.S.C. §1362(7). “Waters of the United States” is not defined further under the Act, so the agencies have been left to try to craft a definition.
The Army Corps and EPA first proposed a WOTUS definition in 1977 and it has faced revisions and legal challenges ever since. The WOTUS definition has faced Supreme Court review in three previous cases:
- U.S. v. Riverside Bayview, 474 U.S. 121 (1985)
- Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001)
- Rapanos v. U.S., 547 U.S. 715 (2006)
In the most recent Supreme Court treatment, the Court did not reach a majority opinion. Justice Scalia authored a plurality opinion, Justice Kennedy wrote a concurring opinion, and Justice Stevens wrote a dissenting opinion. Following the Rapanos decision, lower courts and the agencies have grappled with whether to follow the framework laid out by Justice Scalia or Justice Kennedy. The primary difference is how they dealt with bodies of waters on the fringe of jurisdiction, like wetlands. Justice Scalia would include in WOTUS: “only those relatively permanent, standing or continuously flowing bodies of water forming geographic features that are described in ordinary parlance as streams, oceans, rivers, and lakes…[and] only those wetlands with a continuous surface connection to bodies that are "waters of the United States" in their own right…” Id. at 739-42. Justice Kennedy went beyond wetlands with a “continuous surface connection” to include wetlands and other bodies of water that have a “significant nexus” to more traditional navigable waters. Id. at 759.
The WOTUS definition was revised in 2015 by the Obama Administration to expand the definition and then in 2020 by the Trump Administration to narrow the definition; with both definitions facing swift legal challenges, including vacatur of the Trump rule in 2021. Just recently, on November 18, 2021, EPA and the Army Corps announced that they were issuing a proposed rule to re-establish the pre-2015 definition of WOTUS. The current proposed rule includes the “significant nexus” standard for non-traditional navigable waters.
In the case currently before the Supreme Court, Petitioners Michael and Chantell Sackett purchased property in Idaho in 2004 intending to build a home. When the Sacketts began filling in the wetlands on the property, EPA issued an administrative compliance order stating the property contained wetlands subject to CWA authority. The Sacketts were ordered to restore the property or face daily penalties. The Sacketts sued EPA, challenging the compliance order. The case has wound through the courts for years, eventually landing in the Ninth Circuit, where that court applied Justice Kennedy's “significant nexus” test and held that “EPA reasonably determined that the Sacketts' property contains wetlands that share a significant nexus with Priest Lake, such that the lot was regulable under the CWA and the relevant regulations.” Sackett v. EPA, 8 F. 4th 1075, 1093 (9th 2021).
In their petition for certiorari, Petitioners asked the Court to take the case to clear up the deep confusion over what standard applies and how it is interpreted by lower courts and the agencies. EPA tried to resist certiorari by arguing that the decision below was correctly decided and not in conflict with any opinion of the Court or other courts of appeals. Now, EPA faces an uphill battle before a Court that is more conservative than in 2006 and, in all likelihood, will be receptive to adopting Justice Scalia’s “continuous surface connection” standard, thereby narrowing the scope of the CWA.
EPA to Revise or Replace Trump-Era Clean Water Act Rules, But Will Leave Existing Rules In Place For Now
The U.S. Environmental Protection Agency (“EPA”), under Administrator Michael Regan, has begun the process of reviewing and revising two key Clean Water Act (“CWA”) rules: The Navigable Waters Protection Rule and the CWA Section 401 Certification Rule. In recent court filings in cases where litigants have challenged both of these Trump-era rules, EPA has requested those cases be remanded because EPA has commenced new rulemaking processes that will revise or replace the challenged rules. However, if the courts grant EPA’s requests, EPA has requested that the existing rules remain in effect until EPA finalizes replacement rules through the formal notice and comment rulemaking process.
The first of the two key CWA rules at issue is the Navigable Waters Protection Rule, which defines “Waters of the United States”. This is a significant rule and definition because the jurisdiction of the CWA is limited to Waters of the United States. Thus, by setting the definition of Waters of the United States, EPA establishes the reach of the CWA. Due to the significance of this definition, it has been widely contested throughout the years and every attempt by EPA and the U.S. Army Corps of Engineers to promulgate a definition has faced legal challenges.
In 2019, the Trump Administration rescinded the Obama-era Waters of the United States rule and in 2020, issued the Navigable Waters Protection Rule, narrowing the definition of Waters of the United States. The most significant change in the Trump rule is that the new definition excludes ephemeral waters (those flowing only in direct response to precipitation) and many wetlands that are near other jurisdictional waters but lack a physical or surface connection to them.
In several court filings in June, EPA has stated its plans “to commence a new rulemaking to revise or replace the [Navigable Waters Protection] rule.” Notably, EPA is not requesting vacatur of the existing rule during the rulemaking process.
The second CWA rule facing a similar fate is the CWA Section 401 Certification Rule. Under the CWA, a federal agency may not issue a permit or license for an activity that may result in a discharge into a Water of the United States unless a Section 401 Certification has been issued verifying compliance with water quality requirements. States and authorized tribes are generally responsible for issuing Section 401 Certifications, and they are required to act on a Section 401 Certification request “within a reasonable period of time (which shall not to exceed one year) after receipt” of such a request. 33 U.S.C. § 1341(a)(1).
The Trump EPA issued the final CWA Section 401 Certification Rule on July 13, 2020, with the goal of expediting infrastructure permitting by making the 401 Certification process quicker. The biggest changes made by this rule were limiting the scope of state and tribal certification review and limiting the imposition of conditions in the certifications. Just as with the Navigable Waters Protection Rule, EPA has now indicated in court filings (and on its website) that the Section 401 Certification Rule is under review and will be revised or revoked, but also will not be vacated in the interim.
EPA has a lot of work ahead to propose new versions of these rules for public review and comment. Promulgation of final rules will therefore be many months, if not more than a year away. In the meantime, environmental groups and other challengers have indicated they will continue to challenge the Trump-era rules still in effect. The Corporate Environmental Lawyer blog will keep a close watch and report on all key developments.
In a unanimous decision authored by Justice Thomas, the Supreme Court of the United States ruled in the case of Guam v. United States, No. 20-382, 593 U.S. __ (2021), that a party must resolve “CERCLA-specific liability” in order to trigger contribution rights under § 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).
The question before the Court was whether a settlement between Guam and the United States that resolved claims under the Clean Water Act could be the basis for a contribution claim under § 113(f)(3)(B) of CERCLA. In this case, Guam and the U.S. EPA had entered into a Consent Decree following a Clean Water Act lawsuit, settling the United States’ Clean Water Act claims against Guam and requiring Guam take actions to close and cover a dump site. Thirteen years later Guam sued the United States under CERCLA for cost recovery and contribution, claiming the United States’ earlier use of the dump site exposed it to liability. The district court, in a ruling affirmed by the court of appeals, ruled that Guam had a contribution claim at one point, based on its Clean Water Act Consent Decree because that Decree required remedial measures and provided a conditional release, which sufficiently resolved Guam’s liability for the dump site and triggered a CERCLA contribution claim under § 113(f)(3)(B). However, the Decree also triggered the three-year statute of limitations, which had expired, leaving Guam without any viable claims.
The Supreme Court reversed the lower courts, rejecting the notion that the Clean Water Act Consent Decree was sufficiently similar to a CERCLA settlement to trigger contribution liability. The Court focused on a textual analysis of the statute, which states in relevant part that:
A person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not party to a [qualifying] settlement.
42 U.S.C. § 9613(f)(3)(B).
Of particular note to the Court was the reference in § 113(f)(3)(B) to “response action”, which is a term of art in CERCLA, and appears throughout the Act. The Court reasoned that this language “is best ‘understood only with reference’ to the CERCLA regime.” Guam, slip op. at 6, quoting United States v. Atlantic Research Corp., 551 U. S. 128, 135 (2007). Thus, according to the Court’s reasoning, to resolve liability for a “response action,” a party must engage in a CERCLA-specific settlement, not “settle an environmental liability that might have been actionable under CERCLA.” Id. at 7.
In conclusion, the Court held that “[t]he most natural reading of §113(f)(3)(B) is that a party may seek contribution under CERCLA only after settling a CERCLA-specific liability.” Id. at 9.
Like most major CERCLA decisions, the Court’s ruling answers one question but raises many more. We can expect future litigation on the precise bounds of how specific a settlement need be to qualify as “CERCLA-specific” under the Court’s holding. There will also likely be litigation regarding how this ruling may apply to other provision of CERCLA beyond §113(f )(3)(B). As always, the Corporate Environmental Lawyer Blog will be monitoring these important developments and reporting on what you need to know.
On January 17, 2020, the State of California filed a new complaint against the United States Bureau of Land Management (“BLM”) seeking to block a BLM-issued resource management plan that proposes to open up more than one million acres of California land to hydraulic fracking and other forms of oil and gas drilling. If enacted, the challenged BLM plan would end a five-year moratorium on leasing land in California to oil and gas development.
The federal lawsuit announced by California Attorney General Xavier Becerra asserts that the BLM’s review of environmental impacts associated with its resource management plan violates the National Environmental Policy Act (“NEPA”) and Administrative Procedure Act (“APA”). Specifically, the lawsuit alleges that the BLM failed to sufficiently consider impacts to people who might live near newly drilled oil and gas wells and that the BLM underestimated the environmental impacts of new fracking wells that would become active as a result of the plan. In a news conference announcing the lawsuit, Becerra stated that “much of the federal oil and gas activity in the state happens near some of our most vulnerable communities, communities [that] are already disproportionately exposed to pollution and its health effects.” Finally, California’ lawsuit asserts that BLM failed “to consider conflicts with state plans and policies, including efforts by California to reduce greenhouse gas emissions and fossil fuel consumption to mitigate the devastating consequences of global climate change.”
The legal challenge is not the first made against the BLM’s resource management plan. In 2012, BLM issued a final environmental review supporting its decision to open up approximately one million acres of federal land in California for mineral leasing. At the time, BLM estimated that approximately 25% of the new wells on this land would be used for hydraulic fracturing. However, in 2016, the California courts set aside the plan finding that the BLM’s environmental review had failed to comply with the full requirements of NEPA. On May 3, 2017, BLM entered into a settlement agreement that required the agency to prepare additional NEPA documentation and issue a new decision amending or superseding its resource management plan, as appropriate. The updated plan is the subject of the most recent lawsuit filed by the State of California. In the current lawsuit, California now asserts that approximately 90% of new wells on the federal land will be utilized for hydraulic fracturing.
The recent lawsuit is only one of more than 65 lawsuits filed by the State of California against the Trump Administration. California’s lawsuits include more than 25 challenges to policies and actions proposed by the United States Environmental Protection Agency and other federal agencies responsible for setting environmental and energy policies.
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.
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.
By Matthew G. Lawson
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.
Under the Trump Administration, EPA has expressed a renewed focus on the Superfund program and making sure that site cleanups operate optimally. In 2017, EPA established a Superfund Task Force, “to provide recommendations for improving and expediting site cleanups and promoting redevelopment.” The Superfund Task Force has made a number of recommendations, including recommending that EPA “Promote the Application of Adaptive Management at Complex Sites” and “Broaden the Use of Adaptive Management (AM) at Superfund Sites.”
According to the Superfund Task Force,
Adaptive Management is an approach used at large and/or complex sites that focuses limited resources on making informed decisions throughout the remedial process…Under an Adaptive Management strategy, Regions are encouraged to consider greater use of early and/or interim actions including use of removal authority or interim remedies, to address immediate risks, prevent source migration, and to return portions of sites to use pending more detailed evaluations on other parts of sites.
On April 2, 2018, the Pennsylvania Superior Court issued a potentially groundbreaking decision by holding that trespass and conversion claims arising from hydraulic fracturing are not precluded by the rule of capture. In reaching this conclusion, the court found that the Southwestern Energy Production Company (“Southwestern”) may have committed trespass when it extracted natural gas located under neighboring properties by draining the gas through fissures created from hydrofracturing fluid. Such a holding was almost universally thought to be precluded by the rule of capture. The rule of capture, which can be traced back to 18th century fox hunting, has historically been applied to find that oil and gas companies cannot be held liable for “capturing” oil and gas that drain naturally from neighboring land as a result of legal extraction activities. In differentiating hydraulic fracking from traditional oil and gas extraction, the court focused on the fact that hydraulic fracking actually pumps fluid across property lines to open up non-natural fissures that allow the natural gas to seep back across the property to be extracted.
The potential impact of the Pennsylvania court’s decision has spurred high levels of concern from the greater fracking industry. On the same day that Southwestern filed an appeal requesting an en banc rehearing of the decision, seven separate industry trade groups filed leave with the court seeking permission to file amicus briefs urging the court to grant Southwestern the rehearing. One of these groups, the Marcellus Shale Coalition (“MSC”), is a collection of approximately 200 producers, midstream, and local supply-chain companies that produce more than 95% of the natural gas in Pennsylvania. The group has asserted that the April 2nd ruling interrupts well-established law and creates an “unprecedented form of tort liability” that threatens the entire industry. In a similar filing, the Pennsylvania Chamber of Business and Industry stressed that the decisions could have devastating effects on the industry and the economy of Pennsylvania. According to the American Petroleum Institute, the hydraulic fracking industry currently provides an estimated 322,600 jobs to Pennsylvania and contributes nearly $44.5 million in revenue to the state’s economy.
In Southwestern’s own appeal, the company echoed many of the concerns proclaimed by the industry. The company stressed that the decision would “unleash a torrent of speculative lawsuits” that could threaten the economic livelihood of the industry throughout the state. The company also characterized the April 2nd ruling as an impractical precedent for future decisions. Southwestern noted that the opinion would require courts and juries to speculate whether hydrofracturing fluid located miles below the surface ever moved onto neighboring property, which is a task the company portrayed as “a fool’s errand.”
The ultimate resolution of the matter has potentially far-reaching impacts on the U.S. energy markets. Behind Texas, Pennsylvania is the United States’ second largest producer of natural gas. The state generated 19 percent of the United States’ total output in 2017 and has seen steady gains in production output since 2010. Further, the decision raises questions about whether other state courts may adopt the logic of the Pennsylvania Superior Court and similarly hold that trespass and conversion claims against hydraulic fracking are not precluded by the historic rule of capture.
We will continue to track this case as it moves through the Pennsylvania courts.
On July 25, 2017, Environmental Protection Agency (“EPA”) administrator Scott Pruitt’s “Superfund Task Force” issued a final report revealing the Task Force’s recommendations for streamlining the remediation process of over 1,300 Superfund sites currently overseen by the EPA. The Task Force’s recommendations included a strong emphasis on facilitating the redevelopment of Superfund sites by encouraging private sector investment into future use of contaminated sites. The recommendations were subsequently adopted by Mr. Pruitt, who has repeatedly affirmed that a top priority of the administration is revamping the Superfund program. In the recent months, it appears EPA and the Trump administration have taken new steps to further the objective of pushing private redevelopment for Superfund Sites.
On January 17, 2018, EPA posted a “Superfund Redevelopment Focus List” consisting of thirty-one Superfund sites that the agency believes “pose the greatest expected redevelopment and commercial potential.” EPA claims that the identified sites have significant redevelopment potential based on previous outside interest, access to transportation corridors, high land values, and other development drivers. “EPA is more than a collaborative partner to remediate the nation’s most contaminated sites, we’re also working to successfully integrate Superfund sites back into communities across the country,” said EPA Administrator Scott Pruitt. “[The] redevelopment list incorporates Superfund sites ready to become catalysts for economic growth and revitalization.”
Along the same lines, President Donald Trump’s sweeping infrastructure proposal, released February 12, 2018, proposed an amendment to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) that would allow Superfund sites to access funding from the EPA’s Brownfield Program, which the administration believes could help stimulate redevelopment of the sites. The proposal further requests Congress pass an amendment to CERCLA that would allow EPA to enter into settlement agreements with potentially responsible parties to clean up and reuse Superfund sites without filing a consent decree or receiving approval from the Attorney General. The proposal claims that CERCLA’s limitations “hinder the cleanup and reuse of Superfund sites and contribute to delays in cleanups due to negotiations.”
Time will tell whether the administration’s strategy will be enough to entice new development into the Superfund sites. To follow the progress of EPA’s Superfund redevelopment efforts, visit EPA’s Superfund Redevelopment Initiative website here.
On Monday, March 5, 2018, EPA issued a report titled EPA Year in Review 2017-2018. The report contains an introductory letter from Administrator Pruitt, who states that he has been “hard at work enacting President Donald Trump’s agenda during [his] first year as EPA Administrator.” The report highlights accomplishments at EPA over the past year, with a focus on the roll back of regulations from the Obama Administration, such as the Clean Power Plan and the Waters of the United States Rule. Administrator Pruitt stated that “[i]n year one, EPA finalized 22 deregulatory actions, saving Americans more than $1 billion in regulatory costs.”
According to the report, Administrator Scott Pruitt set forth a “back-to-basics agenda” with three objectives:
- Refocusing the Agency back to its core mission
- Restoring power to the states through cooperative federalism
- Adhering to the rule of law and improving Agency processes
The report also identifies EPA’s “core mission” as “clean air, land, and water,” and argues that in recent years, “central responsibilities of the Agency took a backseat to ideological crusades, allowing some environmental threats – like cleaning up toxic land – to go unaddressed.” In light of these alleged lapses, EPA states that:
Today recognizes the third annual Imagine a Day Without Water event to raise awareness and educate America about the value of water. Over 500 organizations, cities, water authorities, and corporations have joined together once again to focus attention on the importance of this valuable resource and the critical need to upgrade and improve water infrastructure throughout the U.S.
No water to drink, or even to make coffee with. No water to shower, flush the toilet, or do laundry. Hospitals would close without water. Firefighters couldn't put out fires, and farmers couldn't water their crops. Some communities in America already know how impossible it is to try to go a day without our most precious resource: water.
The 2017 Infrastructure Report Card published by the American Society of Civil Engineers provided an overall grade of a D+ for the status and condition of U.S. infrastructure. Particularly as to drinking water, the Report Card noted the following:
- One million miles of pipes deliver drinking water and most date from the early 20th century with a 75-100 year lifespan
- Over 240,000 water main breaks occur annually
- Over $1 trillion dollars is the estimate needed to maintain/upgrade/expand service to meet water demands over the next 25 years.
Can you imagine a day without water? In the context of your business and its operations, please consider the resources available from these two organizations that address the following water-related considerations, including conditions and capacity, funding, public safety, future needs, and resilience and innovation.
On Thursday, September 14th, from 5 pm to 7 pm, environmental attorneys and professionals will come together for a networking reception at Jenner & Block's offices in Chicago. Complimentary food and drinks will be provided thanks to the event’s sponsors. This is the third year Jenner & Block has hosted this event, which continues to grow every year. Jenner & Block will be joined by a number of bar associations and organizations:
- CBA Environmental Law Committee
- CBA Young Lawyers Section Environmental Law Committee
- ISBA Environmental Law Section
- ABA Section of Environment, Energy, and Resources
- Air & Waste Management Association Lake Michigan States Section
- DRI Toxic Tort and Environmental Law Committee
Jenner & Block partner Allison Torrence is a former Chair of the CBA Environmental Law Committee and will be giving brief welcome remarks.
Details for this event are below. If you would like to join us at this reception, please RSVP here.
Environmental Attorney Reception
September 14, 2017 | 5:00 pm to 7:00 pm
Jenner & Block Conference Center | 45th Floor | 353 N. Clark St. | Chicago, IL 60654
As the cleanup, rebuilding, and recovery continues in the aftermath of Hurricane Harvey, there has been increasing news coverage about the environmental consequences resulting from impacts of this devastating storm in Texas. We have all seen the coverage on the Arkema SA chemical plant explosion and fire in Crosby, Texas, as well as this weekend’s news that 13 Superfund sites in the Houston area have been flooded and are experiencing possible damage. What we have not heard much about is action on the part of the Texas Commission on Environmental Quality (TCEQ) to do its part to allow residents and their commercial and industrial businesses to recover.
Last week, TCEQ issued a Request for Suspension of TCEQ Rules that may prevent, hinder, or delay necessary action in coping with Hurricane Harvey. The rules suspended in order to manage Hurricane Harvey impacts address regulatory obligations related to air, water, storage tank, fuel and waste management. In addition, TCEQ has developed a Hurricane Response webpage and made clear the Agency's priority is the recovery efforts helping to restore water and wastewater services as well as to assess damage, manage debris, and bring other critical services back online.
Most substantive federal environmental laws and their implementing regulations also provide emergency exemptions that can be triggered following any natural or manmade disaster to ensure laws do not interfere with rescue and recovery efforts. Most emergency exemptions require a declaration or finding on the part of the United States Environmental Protection Agency (EPA) or of another high-ranking government official. We will address EPA's Hurricane response actions in future blogs.
At a time when the residents of Texas need the best of their government, TCEQ is providing an excellent example of support, help, and a willingness to do what is right under the circumstances. Kudos to TCEQ!
The Department of Homeland Security (DHS) announced yesterday its plans to waive numerous environmental laws to allow more expedient construction of barriers and roads in the vicinity of the international border near San Diego. The decision was signed by then DHS Secretary John Kelly and applies to a 15-mile border segment in San Diego where the Agency plans to upgrade fencing and build border wall prototypes.
DHS issued the waiver pursuant to its authority in Section 102 of the 2005 Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). This law grants the DHS Secretary a number of authorities necessary to carry out DHS’s border security mission. Citing this authority, the DHS notice makes clear that these infrastructure projects will be exempt from complying with critically important environmental laws such as the National Environmental Policy Act, the Endangered Species Act, the Clean Water Act and other laws related to wildlife, conservation, cultural and historic artifacts, and the environment.
This action has been under consideration by DHS and the subject of much discussion among environmental activists. The Center for Biological Diversity already sued DHS earlier this year seeking an updated environmental review of the southern border infrastructure projects.
According to yesterday’s notice, “…while the waiver eliminates DHS’s obligation to comply with various laws with respect to the covered projects, the Department remains committed to environmental stewardship with respect to these projects. DHS has been coordinating and consulting—and intends to continues to do so—with other federal and state agencies to ensure impacts to the environment, wildlife, and cultural and historic artifacts are analyzed and minimized, to the extent possible.”
Even in the wake of everything ongoing in D.C with the new Administration, this action is extraordinary and inconsistent with typical federal government practices, except in the case of an emergency or other exigent circumstances. The final decision will appear in the Federal Register soon.
The Trump Administration signaled its plans to renegotiate the 1994 North American Free Trade Agreement (NAFTA) by issuing the Summary of Objectives for the NAFTA Renegotiation this month. President Trump committed to renegotiate NAFTA in order to obtain more open, equitable, secure, and reciprocal market access with our two largest export markets in Canada and Mexico.
Environmental considerations currently are managed in a side agreement to NAFTA, but one of the Administration’s priorities is to incorporate environmental provisions into the new NAFTA. The Summary outlines 13 environmental issues to be addressed as part of the renegotiation process:
- Bring the environmental provisions into the core of the agreement, rather than in a side agreement.
- Establish strong and enforceable environmental obligations that are subject to the same dispute settlement mechanism that applies to other enforceable obligations of the agreement.
- Establish rules that will ensure that NAFTA countries do not waive or derogate from the protections afforded in their environmental laws for the purpose of encouraging trade or investment.
- Establish rules that will ensure that NAFTA countries do not fail to effectively enforce their environmental laws through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the parties.
- Require NAFTA countries to adopt and maintain measures implementing their obligations under select Multilateral Environmental Agreements (MEAs) to which the NAFTA countries are full parties, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
- Establish a means for stakeholder participation, including commitments for public advisory committees, and a process for the public to raise concerns directly with its government if they believe it is not meeting its environmental commitments.
- Require NAFTA countries to ensure access to fair, equitable, and transparent administrative and judicial proceedings for enforcing their environmental laws, and provide appropriate sanctions or remedies for violations of their environmental laws.
- Provide for a framework for conducting, reviewing, and evaluating cooperative activities that support implementation of the environmental commitments, and for public participation in these activities.
- Establish or maintain a senior-level Environmental Committee, which will meet regularly to oversee implementation of environmental commitments, with opportunities for public participation in the process.
- Combat illegal, unreported, and unregulated (IUU) fishing, including by implementing port state measures and supporting increased monitoring and surveillance.
- Establish rules to prohibit harmful fisheries subsidies, such as those that contribute to overfishing and IUU fishing, and pursue transparency in fisheries subsidies programs.
- Promote sustainable fisheries management and long-term conservation of marine species, including sharks, sea turtles, seabirds, and marine mammals.
- Protect and conserve flora and fauna and ecosystems, including through actions by countries to combat wildlife and timber tracking.
Critics note that the above environmental considerations look much like the provisions in the now defunct Trans-Pacific Partnership that many environmental advocates opposed.
The first round of talks on the possible renegotiation of NAFTA is scheduled to take place in Washington August 16-20. The Summary confirms that “…the new NAFTA will be modernized to reflect 21st century standards and will reflect a fairer deal, addressing America’s persistent trade imbalances in North America.” While part of the agenda, it does not appear that environmental considerations will be a critical portion of these upcoming negotiations.
Jenner & Block's Corporate Environmental Lawyer is pleased to present a guest blog prepared by John Claypool, Director of Project Management at Brown and Caldwell. Brown and Caldwell is a national engineering consulting firm focused on the U.S. environmental sector. The degree to which and manner in which these ASTM standards are incorporated into regulatory standards is an important topic and we appreciate Brown and Caldwell's insight on this topic.
EPA recently issued a direct final rule to amend the requirements for conducting All Appropriate Inquires (AAI) to qualify for the Bona Fide Prospective Purchaser (BFPP) defense under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The direct final rule allows for the use of ASTM International E2247-16, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property. When the final rule becomes effective on September 18, 2017, ASTM E2247-16 can be used to satisfy the statutory requirements for conducting AAI.
Since 2008, the AAI rule at 40 CFR Part 312 has allowed the use of E2247-08 on transactions involving forestland or rural properties. As part of its 5-year review and reapproval cycle, ASTM International made significant changes to E2247-08 and reapproved/reissued it under the E2247-16 designation. A summary of the differences between E2247-08 and E2247-16 is available in the USEPA rulemaking docket (Docket EPA-HQ-OLEM-2016-0786).
The revisions to the AAI rule published in the Federal Register on June 20, 2017 allow the use of E2247-08 and E2247-16 for conducting AAI on forestland and rural property. Since E2247-08 is no longer considered an active standard by ASTM International, the practical implication is that AAI for forestland and rural properties will henceforth be conducted per E2247-16. The direct final rule did not make any changes to the AAI requirements for other types of properties, continuing to allow the use of ASTM E1527-13, Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.
This addition of E2247-16 to the AAI rule may impact both public and private parties intending to claim a limitation on CERCLA liability in relation to the purchase of large tracts of forested land or large rural property. It may also impact parties conducting site characterizations or assessments on large tracts of forested land or large rural properties, when the parties are intending to use a brownfields grant awarded under CERCLA Section 104(k)(2)(B)(ii), including state, local, and tribal governments receive brownfields site assessment grants.
Brown and Caldwell's John Claypool, Brent Callihan and Julie Byrd contributed to the development of the revised ASTM standard, submitting comments to ASTM that led to the development of a working group to revise the standard, ultimately leading to the revised AAI rule.
New research confirms that the quality of environmental, social and corporate governance (ESG) disclosures is greatly improved when companies use the Global Reporting Initiative (GRI) Sustainability Reporting Framework. The Governance & Accountability Institute, Inc. (G&A), the data partner for GRI, also confirms that more companies than ever before are developing and disclosing sustainability reports.
In the first year of its study in 2010, G&A found that 80% of leading U.S. large-cap companies did not publish sustainability reports. The trend has changed over time with 53% of the S&P 500 companies reporting in 2012; 72% reporting in 2013; 75% reporting in 2014; 81% reporting in 2015; and 82% reporting in 2016.
To explore the quality of sustainability reports, G&A worked with The CSR-Sustainability Monitor (CSR-S Monitor) research team at the Weissman Center for International Business, Baruch College/CUNY. The CSR-S Monitor evaluated sustainability reports using a scoring methodology that categorizes the content of each report into 11 components referred to as “contextual elements” including: Chair/Executive Message; Environment; Philanthropy & Community Involvement; External Stakeholder Engagement; Supply Chain; Labor Relations; Governance; Anti-Corruption; Human Rights; Codes of Conduct; and Integrity Assurance. Companies using the GRI framework consistently achieved average contextual element scores higher than the companies not using the GRI for their reporting meaning, in part, that the data provided was of a higher quality and overall more helpful to stakeholders.
Sustainability reporting and ESG disclosures are on the rise. The trend clearly is to encourage and promote more standardized sustainability reporting helping companies provide more reliable, consistent and material information to the public.
On June 27, 2017, EPA Administrator Scott Pruitt announced that EPA and the Army Corps of Engineers will be publishing a proposed rule (the Recodification Rule) that would rescind the Obama Administration’s definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA). EPA states that the Recodification Rule is necessary to “ensure certainty as to the scope of CWA jurisdiction on an interim basis” while EPA and the Army Corps of Engineers conduct “a substantive review of the appropriate scope of ‘waters of the United States’”.
As we previously reported on this blog, the WOTUS Rule (a/k/a the Clean Water Rule) was promulgated by the Obama Administration in 2015, and was the latest attempt to define the jurisdictional limits of the CWA. The CWA limits its jurisdiction to “navigable waters”, which are obliquely defined in the CWA as “the waters of the United States, including the territorial seas.” 33 U.S.C. § 1361(7). The precise definition of “waters of the United States” has been a controversial and well-litigated issue for years.
Today we celebrate World Environment Day—a global celebration of nature and a day to reconnect with the places that matter most to you. Initiated in 1972, World Environment Day is the United Nations' most important day for promoting worldwide awareness and action for protection of the environment. Since it began in 1974, it has grown to become an international platform for public outreach that is widely celebrated in over 100 countries.
This year's host country is Canada where the official celebrations will take place and the 2017 theme is connecting people to nature encouraging all of us to get outdoors and into nature.
There is greater international awareness and attention focused on the protection and preservation of the environment than ever before. Everyone understands the critical environmental concerns ranging from the politics of the Paris Climate Agreement, the adverse impacts of plastic waste in our oceans, to the international focus on water quality and quantity. World Environment Day is a time to reflect upon and appreciate that the welfare of the planet, including the economic viability of its many nations, depends on the collective efforts we make to protect, preserve and conserve our natural resources and the environment.
Learn more about World Environment Day and efforts around the world to celebrate and improve the environment.
A recent case reminds us that not all communications between lawyers and environmental consultants are privileged despite best efforts to make them so. In Valley Forge Ins. V. Hartford Iron & Metal, Inc., the Northern District of Indiana ruled that the attorney-client privilege doesn’t protect a lawyer’s emails to environmental contractors when the communications concern remediation as opposed to litigation. This case provides a good overview of the protections afforded by the attorney-client privilege and the work-product doctrine in the environmental law context.
At issue are Hartford Iron’s communications with environmental contractors Keramida, Inc. and CH2M Hill, Inc. which were the subject of a motion to compel filed by Valley Forge. Following an in camera review of 185 emails, the court concluded that the evidence reflects that “….Hartford Iron retained Keramida and CH2M as environmental contractors for the primary purpose of providing environmental consulting advice and service to Hartford Iron in designing and constructing a new stormwater management system, not because Hartford Iron’s counsel needed them to “translate” information into a useable form so that counsel could render legal advice.”
The Court did find that certain of the emails were subject to the work-product doctrine as the communications were prepared for the purposes of litigation and that IDEM and EPA already had filed suit against Hartford Iron.
Despite the best efforts of lawyers, not all communications are privileged. The legal privileges are narrowly construed and generally do not protect communications with environmental consultants.
Waters of the United States Case Going Forward in Supreme Court Despite Trump Executive Order To Rescind or Revise the Rule
The controversial Waters of the United States (WOTUS) Rule, promulgated under the Obama Administration, will have its day in the U.S. Supreme Court, despite the Trump Administration’s efforts to stall that litigation while the rule is being revised by the new administration.
As previously discussed in this blog, the WOTUS Rule, also called the Clean Water Rule, was published by U.S. EPA and Army Corps of Engineers on June 29, 2015. The WOTUS Rule defines the scope of waters protected under the Clean Water Act (CWA). The CWA limits its jurisdiction to “navigable waters”, which are defined obliquely as “the waters of the United States, including the territorial seas.” 33 U.S.C. § 1361(7). U.S. EPA and the Army Corps of Engineers have attempted numerous times to define “waters of the United States”, and thereby define the jurisdictional scope of the CWA. Every such effort has been met with legal court challenges, with the previous definition being struck down by the U.S. Supreme Court in a plurality decision. Rapanos v. United States, 547 U.S. 715 (2006).