Sustainability Feed

New OEHHA Proposition 65 Acrylamide Warning Label Does Little to Resolve Pending First Amendment Challenges

P65 Warning LabelBy Daniel L. Robertson, Associate Attorney, and Steven M. Siros, Chair, Environmental and Workplace Health & Safety Law Practice

On September 16, 2022, California’s Office of Environmental Health Hazard Assessment (OEHHA) submitted to the California Office of Administrative Law (OAL) a revised Proposition 65 warning label requirement for the use of acrylamide in food and beverages that OEHHA claims will resolve the First Amendment claims being asserted by the California Chamber of Commerce (CalChamber) in federal district court in California.  OAL is expected to approve OEHHA’s “safe harbor warning” for acrylamide by the end of October 2022.     

Under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as Proposition 65 (Prop. 65), businesses are required to provide warnings to consumers about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm.  As of February 25, 2022, almost 1,000 chemicals are subject to this requirement and one of these chemicals is acrylamide. 

Acrylamide can form through a natural chemical reaction in high-temperature cooking processes such as frying, roasting, and baking, and is commonly found in food products such as coffee, grain and potato products.  Studies indicate that it has likely always been present in foods cooked at high temperatures.

In 2019, CalChamber sued the California Attorney General for violating its members’ First Amendment rights against compelled speech by requiring food products containing acrylamide to include a Prop. 65 cancer warning.  In its complaint, CalChamber alleges that acrylamide was identified as a carcinogen solely on the basis of laboratory animal studies, and that its members will be required to convey “to consumers the false and misleading message that consuming the products will increase consumers’ risk of cancer, even though there is no reliable evidence that exposure to dietary acrylamide increases the risk of cancer in humans.”  The Council for Education and Research on Toxics (CERT) intervened in the matter to defend the Prop. 65 acrylamide warning.

In March 2021, the court issued a preliminary injunction that barred new Prop. 65 acrylamide lawsuits from being filed during the pendency of the litigation, noting that the Attorney General had not shown that the warning requirements were “purely factual and uncontroversial.”  CERT appealed the court’s ruling and in March 2022, the Ninth Circuit Court of Appeals upheld the lower court’s ruling, thereby reinstating the district court’s preliminary injunction.  The Ninth Circuit specifically acknowledged statements by scientific bodies such as the Food and Drug Administration, American Cancer Society, the National Cancer Institute, and even the State of California to emphasize the “robust disagreement by reputable scientific sources” of whether acrylamide can be linked to cancer in humans.

In direct response to CalChamber’s First Amendment challenge, on September 17, 2021, OEHHA issued a Notice of Proposed Rulemaking that proposed the following “safe harbor warning” for acrylamide in food and beverages:

Consuming this product can expose you to acrylamide, a probable human carcinogen formed in some foods during cooking or processing at high temperatures. Many factors affect your cancer risk, including the frequency and amount of the chemical consumed. For more information including ways to reduce your exposure, see www.P65Warnings.ca.gov/acrylamide.  

Notwithstanding OEHHA’s efforts to respond to CalChamber’s First Amendment challenge, the new “safe harbor warning” will not stop the ongoing litigation in that CalChamber claims that this new warning language continues to violate its members’ First Amendment rights.  As such, the CalChamber lawsuit will continue to move forward and any subsequent ruling by the court will provide additional clarification on potential First Amendment limitations on Prop. 65 warnings. 

We will continue tracking Proposition 65 developments through the Corporate Environmental Lawyer blog.  Regardless of OAL’s decision on the latest regulatory proposal, the current action and similar litigation relating to glyphosate establish a litigation roadmap for businesses that may otherwise be subject to Prop. 65 requirements based on disputed science.

Jenner & Block Wishes Bon Voyage to Gay Sigel as She Starts Her Next Adventure with the City of Chicago

G. Sigel SuperwomanAs 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! 

Steven M. Siros, Allison A. Torrence, Andi S. Kenney

EHS

U.S. EPA Offers Roadmap for Environmental Justice-Based Permit Denials

Linkedin_Steven_Siros_3130By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

EPA logoOn August 16, 2022, U.S. EPA released its Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (FAQ) that provides guidance to federal, state, and local environmental permitting entities on integrating environmental justice (EJ) and civil rights into relevant environmental permitting decisions.  Lilian Dorka, director of U.S. EPA’s External Civil Rights Compliance Office (ECRCO), emphasized that the information in the FAQ isn’t new and that environmental permitting decisions are always supposed to consider the EJ and civil rights impacts of the permit.  Rather, according to Director Dorka, the FAQ is an effort by U.S. EPA to compile existing information on integrating EJ and civil rights into the permitting process into a single document. She also noted that this is an interim document and EPCRO is working on separate guidance document to provide further direction on how permitting entities should consider civil rights in permitting decisions, including Title VI’s disparate impact analysis. 

One of the more interesting parts of the FAQ is the following paragraph:

If there are no mitigation measures the permitting authority can take, whether within or outside the permitting program, that can address the disparate impacts, and there is no legally sufficient justification for the disparate impacts, denial of the permit may be the only way to avoid a Title VI violation. Whether denial of a permit is required to avoid a Title VI violation is a fact-specific determination that would take into account an array of circumstances, including whether the facility will have an unjustified racially disproportionate impact, as well as the less discriminatory alternatives available. 

This is one of the first times that U.S. EPA has clearly articulated its position that a permit can be denied solely because it may violate Title VI although the occasions when a permit has been denied on this basis have historically been far and few between. However, a recent example of how EJ and civil right issues can impact the permitting process is currently playing out in Chicago where the City of Chicago denied a permit for a metal recycling facility following receipt of a letter from U.S. EPA noting significant civil rights concerns associated with the facility’s operations.  Notwithstanding that the Illinois Environmental Protection Agency had already issued the facility an air permit allowing the facility to commence operations,  the City of Chicago denied the facility an operating permit based primarily on the purported disparate impact of the facility on disadvantaged communities.  The City’s permit denial is currently being challenged in an administrative proceeding. 

The FAQs are clearly consistent with U.S. EPA’s ongoing efforts to integrate President Biden’s Justice40 Initiative that sets a goal of ensuring that 40% of the overall benefits of certain federal investments flow to disadvantaged communities. We will continue to track U.S. EPA’s efforts to ensure that its permitting decisions are appropriately protective of disadvantaged communities at the Corporate Environmental Lawyer blog. 


OMB Throws Potential Speed Bump in Front of U.S. EPA’s Efforts to Designate PFAS as CERCLA Hazardous Substances

Linkedin_Steven_Siros_3130By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

PFASOn August 12, 2022, the Office of Management and Budget (OMB) completed its review of U.S. EPA’s proposed rule to designate perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as CERCLA hazardous substances.  Designation as a CERLA hazardous substances would have significant ramifications, including requiring the reporting of releases of reportable quantities of these substances and potentially resulting in the reopening of previously closed CERCLA sites.  These ramifications are discussed in a previous Corporate Environmental Lawyer blog.

OMB had previously designated the proposed rule as “other significant” which would not have required U.S. EPA to issue a regulatory impact analysis (RIA).  “Other significant” designations are reserved for rules expected to have costs or benefits less than $100 million annually.  In response to a number of comments, including comments from the U.S. Chamber of Commerce that estimated annual costs in excess of $700 million, the OMB has changed its designation to “economically significant” which will require U.S. EPA to conduct an RIA. 

Although it is very unlikely that the requirement to conduct an RIA will deter U.S. EPA in proceeding with its plans to designate PFOA and PFOS as CERCLA hazardous substances, it will require U.S. EPA to analyze whether its proposed rule is necessary and justified to achieve U.S. EPA’s goals and to clarify how its rule is the least burdensome and most cost-effective and efficient mechanism to achieve that goal.  OMB will review and comment on U.S. EPA’s RIA and may require that changes be made to U.S. EPA’s analysis. 

Again, the requirement to conduct the RIA is unlikely to derail U.S. EPA’s efforts to designate these chemicals as CERLA hazardous substances but it could jeopardize U.S. EPA’s summer 2023 deadline for finalizing its rule.  We will continue to track and report on PFAS related issues at the Corporate Environmental Lawyer.

Inflation Reduction Act: Is the U.S. Finally Poised to Tackle Climate Change?

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By
Allison A. Torrence 


CapitalIn a compromise move many months in the making, on August 7, 2022, the Senate passed a spending bill dubbed the Inflation Reduction Act of 2022, which contains provisions aimed at lowering drug prices and health care premiums, reducing inflation, and most notably for our readers, investing approximately $369 billion in energy security and climate change programs over the next ten years. The Inflation Reduction Act, which is the Fiscal Year 2022 Budget Reconciliation bill, passed on entirely partisan lines in the Senate, with all 50 Democratic senators voting in favor, all 50 Republicans voting against, and Vice President Harris breaking the tie in favor of the Democrats. The bill is currently pending before the House of Representatives, where it is expected to be hotly contested but ultimately pass.

According to Senate Democrats, the Inflation Reduction Act “would put the U.S. on a path to roughly 40% emissions reduction [below 2005 levels] by 2030, and would represent the single biggest climate investment in U.S. history, by far.” There are a wide variety of programs in this bill aimed at achieving these lofty goals, including:

  • Clean Building and Vehicle Incentives
    • Consumer home energy rebate programs and tax credits, to electrify home appliances, for energy efficient retrofits, and make homes more energy efficient.
    • Tax credits for purchasing new and used “clean” vehicles.
    • Grants to make affordable housing more energy efficient.
  • Clean Energy Investment
    • Tax credits to accelerate manufacturing and build new manufacturing plants for clean energy like electric vehicles, wind turbines, and solar panels.
    • Grants and loans to retool or build new vehicle manufacturing plants to manufacture clean vehicles.
    • Funding for EPA, DOE and NOAA to facilitate faster siting and permitting of new energy generation and transmission projects.
    • Investment in the National Labs to accelerate breakthrough energy research.
  • Reducing Carbon Emissions Throughout the Economy
    • Tax credits for states and electric utilities to accelerate the transition to clean electricity.
    • Grants and tax credits to reduce emissions from industrial manufacturing processes like chemical, steel and cement plants.
    • Funding for Federal procurement of American-made clean technologies to create a stable market for clean products—including purchasing zero-emission postal vehicles.
  • Environmental Justice
    • Investment in community led projects in disadvantaged communities, including projects aimed at affordable transportation access.
    • Grants to support the purchase of zero-emission equipment and technology at ports.
    • Grants for clean heavy-duty trucks, like busses and garbage trucks.
  • Farm and Rural Investment
    • Funding to support climate-smart agriculture practices and forest conservation.
    • Tax credits and grants to support the domestic production of biofuels.
    • Grants to conserve and restore coastal habitats.
    • Requires sale of 60 million acres to oil and gas industry for offshore wind lease issuance.

Drilling down on some of these many provisions, the clean vehicle consumer tax credit has already sparked controversy due to the requirement that certain manufacturing or components be sourced in North America. The Inflation Reduction Act would maintain the existing $7,500 consumer tax credit for the purchase of a qualified new clean vehicle. The Act would get rid of the previous limit that a single manufacturer could only offer up to 200,000 clean vehicle tax credits—a limit that many manufacturers were hitting. However, under the new bill, that tax credit is reduced or eliminated for electric vehicles if the vehicle is not assembled in North America or if the majority of battery components are sourced outside of North America and if a certain percentage of the critical minerals utilized in battery components are not extracted or processed in a Free Trade Agreement country or recycled in North America. Manufacturers have indicated these battery sourcing requirements are currently difficult to meet, and may result in many electric vehicles being ineligible for this tax credit in the near term.

Another controversial point in the Act is the handling of oil and gas rights vis-à-vis wind farm projects. The Act would allow the sale of tens of millions of acres of public waters to the oil and gas industry as part of an overall plan to require offshore oil and gas projects to allow installation of wind turbines. A group of 350 climate groups, including Senator Bernie Sanders, criticized this and other provisions they saw as favorable to the oil and gas industry in the Act. Despite his criticism of certain aspects of the Inflation Reduction Act, Senator Sanders ultimately voted for the bill.

The House is expect to vote on the Inflation Reduction Act very soon and if it is passed by the House, President Biden will sign it into law. We will continue to track the Act’s progress and its impact on the regulated community. You can follow the Corporate Environmental Lawyer Blog for all of the latest developments.

U.S. EPA Updates Regional Screening Levels to Add Five New PFAS Chemicals

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice


EPA logoOn May 18, 2022, U.S. EPA updated its Regional Screening Level tables to include five new per- and polyfluoroalkyl substances (PFAS).  The five new PFAS compounds added to the RSL tables are hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA – sometimes referred to as GenX chemicals), perfluorooctanesulfonic acid (PFOS), perfluorooctanoic acid (PFOA), perfluorononanoic acid (PFNA), and perfluorohexanesulfonic acid (PFHxS). U.S. EPA added its first PFAS substance, PFBS or perfluorobutanesulfonic acid, to the RSL tables in 2014 and updated that listing in 2021 when U.S. EPA released its updated toxicity assessment for PFBS.

The RSLs are risk-based screening values for residential and industrial soils and tap water that U.S. EPA relies upon to help determine if remediation is necessary.  Although U.S. EPA is quick to point out that the RSLs are not cleanup standards, regulators at both the state and federal levels rely on these RSLs to drive decision-making at contaminated sites.  The regulators also rely on these RSLs notwithstanding that U.S. EPA has yet to officially designate any PFAS as a CERCLA hazardous substance or RCRA hazardous waste (although efforts are ongoing on both fronts--CERCLA hazardous substances /  RCRA hazardous wastes).

U.S. EPA set the screening levels for PFOA, PFOS, PFNA, and PFHxS based on the Minimal Risk Levels from the Agency for Toxic Substances and Disease Registry’s toxicological profiles.  The screening level for HFPO-DA was set based on a final, peer-reviewed toxicity value.  For example, the screening level for PFOS is set at 38 parts per trillion for tap water and 1.6 parts per million for industrial soils and the screening level for PFOA is set at 60 parts per trillion for tap water and 2.5 parts per million for industrial soils   

As we await further U.S. EPA action with respect to regulating PFAS under RCRA and CERCLA, it is interesting to note that U.S. EPA is currently engaged in a significant information gathering exercise related to historical PFAS use.  Relying on its authority under CERCLA Section 104(e), U.S. EPA has recently issued scores of information requests seeking information regarding facilities’ past PFAS uses and practices.  The use of these information requests is consistent with the statements in U.S. EPA’s 2021 PFAS Roadmap where U.S. EPA indicated that it intended to rely on its various enforcement tools to identify and address PFAS releases. 

We will continue to provide timely updates on PFAS-related issues at the Corporate Environmental Lawyer blog. 

SEC Enforcement Division's ESG Task Force "Lifts the Vale" on Its Scrutiny of ESG Disclosures

May RielySigelBy Alexander J. May, Charles D. Riely, and Gabrielle Sigel

Since early 2021, the SEC has emphasized that ESG-related issues are important to investors and a key SEC disclosure and enforcement priority. Although the agency’s heightened focus on these issues led to the recent proposal for new climate disclosures, the SEC also has made clear that it would seek to bring cases under existing law and not wait for new rules to be passed.

The reality that the SEC Enforcement Division is on the ESG beat was reinforced late last month, when the Climate and ESG Task Force filed charges against a Brazilian mining company – Vale, SA. Vale describes itself as the world’s largest producer of iron ore, pellets, and nickel. The case stems from an investigation opened after one of the company’s dams collapsed, causing over 200 deaths and dramatic environmental damage. In its complaint, the SEC alleged that Vale made misstatements about its dam's safety and engaged in deceptive conduct that concealed it had committed misconduct in obtaining required certifications related to dam safety. After the SEC filed action, Vale indicated that it denied the allegations in complaint and intended to defend the action.

The SEC’s approach to the Vale litigation provides a roadmap for public companies to consider how ESG-related disclosures and statements will be scrutinized when the company is impacted by adverse events that are ESG-related. It illustrates that companies should be prepared for the SEC to closely scrutinize statements about risk in ESG disclosures such as sustainability reports or climate impact analyses. This alert discusses the SEC’s case against Vale and real-world “lessons learned” for all public companies when publishing materials about ESG, climate, and operational risks.

Summary of the SEC’s Allegations in Complaint against Vale

The SEC’s complaint alleges that Vale failed to make appropriate disclosures in the lead-up to an environmental disaster that had a direct impact on its investors’ bottom line. The January 25, 2019 collapse of Vale’s Brumadinho dam was described by the SEC as “one of the worst mining disasters in history,” releasing “nearly 12 million cubic tons of mining waste... – a toxic sludge of iron, manganese, aluminum, copper, and other rare earth minerals – in a deluge rushing downhill toward the Paraopeba River.” Compl. ¶2. The disaster killed 270 people “while also poisoning the Paraopeba River and its tributaries and causing immeasurable environmental, social, and economic devastation.” Id. As a result of the dam’s collapse, both the company’s financial performance and stock performance were impacted. In the earnings released the quarter after the dam’s collapse, Vale “reported quarterly loss and negative earnings (EBITDA) for the first time in its history.” Compl. ¶212. Vale’s corporate credit rating was also downgraded to junk status. In the aftermath of the dam’s collapse, the SEC also alleged that Vale’s American Depository Shares “fell by nearly 25%, wiping out approximately $4.4 billion in market capitalization.” Id.

The SEC alleged that “Vale and its executives knowingly or recklessly engaged in deceptive conduct and made materially false and misleading statements to investors about the safety and stability of its dams.” Compl. ¶¶277, 280, 283. As is typical, the SEC complaint details the key section of the defendant’s periodic statements that it alleged were false and misleading. Compl. at ¶284. In addition, the SEC included allegations that reflected its investigation had focused closely on the company’s ESG-related disclosures. The complaint includes false and misleading statements in Vale’s sustainability reports and “ESG Webinars” posted on the company’s public website. E.g., Compl. ¶¶ 23, 29, 245.

In alleging fraud, the SEC emphasized that Vale had committed misconduct in connection with obtaining dam stability declarations required by local law. Because of past disasters in Brazil, the company was required to obtain stability declarations from auditors to certify that auditor had approved the mine’s safety. Compl. ¶ 1. To obtain the required certifications, the SEC alleged that Vale “concealed material information from its dam safety auditors,” and “concealed material and “removed auditors and firms who threatened Vale’s ability to obtain [the required] dam stability declarations.” Id. The SEC also alleged that it “removed auditors and firms who threatened Vale’s ability to obtain dam stability declarations.” Id.

Although statements to auditors and local regulators are not typically themselves actionable under the federal securities laws, the SEC used this misconduct to support its argument that Vale defrauded investors. First, it alleged that Vale described the stability declarations that it had obtained without also disclosing the circumstances in why it procured these certifications. Second, in pursuing its case, the SEC also used this misconduct to prove the company’s executives acted in bad faith. Consistent with this, the SEC emphasized Vale’s “deceptive conduct” in connection with the audit through the complaint.

In framing this case as about ESG misstatements, the SEC was able to note that Vale itself had highlighted dam safety as an important ESG issue. Undoubtedly, Vale’s own ESG characterization of its publications addressing dam safety made them a target for an enforcement analysis with an ESG lens. For example, in 2017, in the last Sustainability Report issued before the Brumadinho dam collapse, Vale identified “priority topics” in its “materiality matrix,” which included commitments concerning “health and safety of the workforce and of the community” and “management of social, environmental and economic impacts,” as well as “management of mineral waste” and “management of business and operational risks.” Vale publicly considered “sustainability” to include many aspects of its operations, including dam safety. 2017 Sustainability Report, pp. 11-12. Indeed, in the 2019 Sustainability Report, issued in the year after the dam collapse, Vale described the consequences of the dam collapse using ESG-type language, “the rupture...cannot be understood only in light of the survey of its impacts on the population and the environment. For the company, these situations impacted the human rights of the people affected, residents and local workers.” 2019 Sustainability Report, p. 14. Thus, Vale’s emphasis on ESG issues in its framing of its operations and goals apparently gave the SEC an opportunity to focus on “ESG disclosures” as part of its Climate and ESG Task Force enforcement initiative.

Potential Implications and Lesson Learned

The SEC emphasized that the case against Vale was part of its focus on ESG-related issues. In the press release announcing the filing of the action against Vale, Gurbir Grewal, the Director of the Enforcement Division, emphasized the SEC’s consistent theme that ESG statements are material to investors. Grewal said, “Many investors rely on ESG disclosures like those contained in Vale’s annual Sustainability Reports and other public filings to make informed investment decisions,” and he stated that the company’s misstatements “undermined investors’ ability to evaluate the risks posed by Vale’s securities.”

The SEC’s focus on ESG and climate issues has increased the importance of ensuring the accuracy of disclosures (and omissions) on those issues. Although the Vale case represents a unique set of facts, it provides an important reminder on importance of carefully vetting ESG-related disclosures. Such ESG disclosures should be considered not just a marketing initiative but should be scrutinized carefully for accuracy and proper caveats. In practice, this means that companies should ensure that it has backup for each statement made. In addition, companies should be mindful of how “worst case” scenarios or “black swan” events could impact their disclosures.

The case also highlights that the SEC will investigate a potential defendant’s interactions with regulators in evaluating fraud charges. If it finds evidence of misconduct, the SEC could cite it to prove intent to deceive or to allege that the lies to investors were designed to conceal misconduct.

This reinforces the importance of making sure communications with such regulators are carefully vetted. In the US, for example, companies often disclose information about their workplace safety and environmental operations. A serious workplace or environmental accident resulting in a material impact could lead to an SEC enforcement action led by its Climate and ESG Task Force, in addition to any fines, penalties, or damages resulting from the accident itself.

Conclusion

The Enforcement Division’s focus on ESG-related issues is likely to continue. As detailed above, the SEC’s action against Vale provides a roadmap for how they will approach these issues and this framework can help companies better prepare for this scrutiny.

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Law Clerk Claudia M. Diaz-Carpio is a contributing author to this client alert.

Vermont Joins Growing Number of States Allowing Medical Monitoring for Alleged Exposure to Chemicals

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

black, stethoscope, eyeglasses, white, surface, ecg, electrocardiogram, heartbeat, heart, frequency, curve, cardiology, check-up, heart diseases, healthcare, medical, pulse, live, pulsating, drug, pills, tablets, glasses, healthcare and medicine, medical exam, doctor, medical equipment, studio shot, examining, healthy lifestyle, white background, medical supplies, medical instrument, medicine, indoors, diagnostic medical tool, occupation, people, beauty, pill, equipment, still life, care, pulse trace, doctor's office, healthcare worker, 5K, CC0, public domain, royalty freeOn April 21st, Vermont Governor Phil Scott signed into law Senate Bill 113 that provides a cause of action for medical monitoring for individuals exposed to toxic chemicals.  The new law specifically provides persons without a present injury or disease with a cause of action for medical monitoring if the following conditions are demonstrated by a preponderance of the evidence:

  • Exposure to a toxic substance at a rate greater than the general population;
  • The exposure is a result of tortious conduct of the defendant;
  • As a result of the exposure, plaintiff has suffered an increased risk of contracting a serious disease;
  • The increased risk makes it medically necessary for plaintiff to undergo periodic medical examinations different from that prescribed for the general population; and
  • Monitoring procedures exist that are reasonable in cost and safe for use.

The bill also provides for an award of attorneys’ fees and other litigation costs. 

The new law comes on the heels of a Vermont federal court's approval of a $34 million dollar class action settlement relating to alleged PFAS exposures that included a $6 million dollar medical monitoring fund. 

With its new law, Vermont joins Arizona, California, the District of Columbia, Florida, Massachusetts, Missouri, New Jersey, Ohio, Pennsylvania, Utah and West Virginia as states that specifically allow lawsuits seeking reimbursement for medical monitoring costs in the absence of present injury or disease.   However, unlike these other states where the right to medical monitoring is a right recognized by the courts, Vermont is one of first states in the nation to provide that right via statute.  Other states may well follow Vermont’s lead and there have been ongoing albeit unsuccessful efforts to create a federal cause of action for medical monitoring for exposure to certain toxic chemicals at the federal level.

We will continue to provide updates on federal and state efforts to codify the ability to bring claims seeking medical monitoring relief at the Corporate Environmental Lawyer blog.   

Embracing the Winds of Change Through Investments in the United States’ Energy Future

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By 
Matthew G. Lawson

 

Earth Week
“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.

An Uncertain Future: Legal Challenges and the Forthcoming Climate Refugee Crisis

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By Connor S.W. Rubin 

Earth Week
The Russian invasion of Ukraine has led to over 11 million people fleeing their homes, and 5 million who have reportedly left Ukraine – a staggering number for a conflict that began in late February. However, while the war in Ukraine is one of the latest events causing a surge of refugees, those fleeing Russian aggression are by no means alone. As of the most recent data from the United Nations High Commissioner on Refugees (“UNHCR”), which counts until mid-2021, there were 20,835,367 people qualified as refugees under the UNHCR’s mandate – an uptick from the 20,661,855 recorded in 2020. Additionally, the UNHCR tracked 50,872,901 “internally displaced persons of concern” during the same period in 2021.

These numbers reflect the staggering impact of human conflict and economic instability; however, they do not show the full impact of human activity. The term “refugee” has a specific definition, laid out in the 1951 Convention Relating to the Status of Refugees and its 1967 Protocol (together “the Convention”). The definition includes any person who crosses a border “owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion.” That definition, written 24 years before Wallace Broecker first put the term “global warming” into the public domain, does not include those fleeing climate disasters in its definition. While recent legal guidance from the UNHCR notes that communities impacted by climate change “may be exposed to a risk of human rights violations that amount to persecution within the meaning of the 1951 Convention” due to limitations on “access to and control over land, natural resources, livelihoods, individual rights, freedoms and lives”, impacts of climate change alone do not qualify someone fleeing their homeland as a refugee. This is because fleeing formerly arable land that no longer sustains crops due to gradual desertification or fleeing cities that have become unlivable due to flooding, fires, or other extreme events do not inherently create “a well-founded fear of being persecuted.”

Is it time for an update to the definition? Some commenters believe so. According to the World Bank, by 2050 over 143,000,000 people could be intra- or internationally displaced from Sub-Saharan Africa, South Asia, and Latin America by climate change. This is roughly equivalent to the populations of California, Texas, Florida, New York, Pennsylvania, Illinois, and Tennessee combined. Without changes to how we view refugees, many of these people may be forced from the areas they’ve lived for generations without any legal status or protections. Advocates who support such changes argue that the current definition of “refugee” under international law fails to include many people forced to flee their home for reasons that fit the spirit of refugee law, but not the strict limitations imposed by the 1951 Convention. The (aptly named) advocacy group “Climate Refugees” gives examples of hypothetical cases, including “the Bangladeshi family displaced across borders by a disaster, the subsistence farmer in Chad with no option but to leave his country because he lacks water for farming, or a mother forced to flee her country because of a climate change-induced resource war.” Such displaced people fall into the goals as stated in the preamble of the 1951 Convention that all people should be able to “enjoy fundamental rights and freedoms without discrimination.” As further articulated by Andrew Schoenholtz in the Chicago Journal of International Law, while “some individuals displaced by natural disasters and climate change may be ‘persecuted’ in connection with a characteristic protected by the Refugee Convention, the vast majority of these newest forced migrants will need new norms developed to address their unique situation.”

Other (though less ubiquitous) compacts or treaties such as the 1969 Convention Governing the Specific Aspects of Refugee Problems in Africa, by the Organisation for African Unity – subsequently adopted by the African Union (“the OAU Convention”) and the 1984 Cartagena Declaration have expanded the definitions of “refugee”, but these may also be inadequate for what advocates seek. The 1969 OAU Convention was organized as many African states were either newly freed from colonialism, or else still fighting for freedom. As such, the definition of refugee was expanded to include “every person who, owing to external aggression, occupation, foreign domination or events seriously disturbing public order in either part or whole of his country of origin or nationality.” The “events seriously disturbing public order” could likely be found to include natural disasters but may still not be fully inclusive of climate change’s pernicious, but slower-acting changes. Further, the requirement of “serious” disturbance of the public order may require large-scale disorder, which may not be present in each circumstance. The Cartagena Convention is a non-binding regional instrument signed by 10 Latin American nations. The definition of refugee is like that found in the OAU Convention’s and includes “persons who have fled their country because their lives, security or freedom have been threatened by generalized violence, foreign aggression, internal conflicts, massive violation of human rights or other circumstances which have seriously disturbed public order.” These two instruments are uniquely broad in their definition, and even they may not include the full sum of those advocates seek to include in a new definition of “climate refugee.”

However, that may not be the case for long. On February 4, 2021, President Biden signed Executive Order 14013 entitled Rebuilding and Enhancing Programs to Resettle Refugees and Planning for the Impact of Climate Change on Migration. This order required the National Security Advisor and Secretaries of State, Defense, Homeland Security, the Director of USAID, and the Director of National Intelligence to “prepare and submit … a report on climate change and its impact on migration, including forced migration, internal displacement, and planned relocation.” That report, released in October of 2021, advocates for an interagency working group to address growing climate migration and its effects, and an expansion of the use of Temporary Protected Status to help resettle those impacted most severely by climate disasters. While stopping short of what some advocates hoped for in terms of seeking to declare climate refugees protected, the report at least shows a willingness to substantively engage in the effects of climate change and its role in global movement.

As the world grapples with how to prevent climate change, and increasingly turns to how to adapt to the effects of climate change, climate refugees will continue to be a growing problem around the world. Addressing their legal status is just one step in a complex and quickly evolving landscape.


“Silent Spring” and the Life Cycle of Emerging Contaminants

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

Earth Week 2022

On the 60th anniversary of the publication of Rachel Carlson’s groundbreaking book “Silent Spring”, the world continues to struggle to manage the human health and environmental risks associated with newly discovered emerging contaminants.  Silent Spring focused on the challenges associated with managing the risks associated with pesticides (and more specifically DDT), and even today, many of the largest personal injury verdicts are associated with alleged exposure to pesticides. 

Over the many years since Silent Spring, numerous contaminants have moved through the emerging contaminant life cycle, including asbestos, dioxins, PCBs, MTBE, BPA, 1,4-dioxane, and most recently, per- and polyfluoroalkyl substances (PFAS) (although PFAS seems stuck in the middle of the life cycle).      

The life cycle journey of emerging contaminants has been influenced significantly by our improved ability to understand the potential impacts of these emerging contaminants on human health and the environment.  As new contaminants are identified, resources are devoted to better understanding the potential environmental and health risks associated with these contaminants and regulations generally evolve to mitigate identified risks.  In response to increased regulatory pressure, industry’s use of chemicals evolves and the risks are mitigated.  Of course, industry’s use of these chemicals also evolves and is influenced by lawsuits when the regulations and/or the enforcement of the regulations lags.  

In addition to improved understanding of the risks posed by some of these emerging contaminants, the fact that we are able to measure smaller and smaller quantities of these contaminants also impacts the life-cycle journey of these emerging contaminants.  When I started practicing environmental law in the dark ages, contaminants in soil and groundwater were measured in parts per thousand.  As science evolved to detect lower and lower levels, regulatory levels moved from parts per million to parts per billion, and then parts per trillion, and PCBs are now regulated in parts per quadrillion.   As detection levels drop, the number of new emerging contaminants will increase and the life-cycle journey for each of these contaminants begins.  

A lot can be said for the progress that has been made since the summer of 1962.  Although some will argue it should still be faster, the time from discovery of the contaminant to identification of risks and regulation of these identified risks has greatly improved since the 1960s.  This is due in part to the fact society has a much lower tolerance for risks posed by emerging contaminants and is much quicker to demand a response from the regulators now than was the case in the 1960s when environmental laws in the United States were in their infancy. A reformed TSCA is better situated to address both environmental and health and safety impacts of chemicals (both newly manufactured chemicals and new chemical uses).   U.S. EPA, working in collaboration with manufacturers, implemented a global stewardship program to eliminate the manufacture and import of long-chain PFAS compounds.  In October 2021, U.S. EPA announced its PFAS Strategic Roadmap intended to implement a whole-of-agency approach to addressing PFAS.

As our understanding of risks evolves and our detection levels drop, it is inevitable that we will continue to identify new emerging contaminants that need to be regulated.  However, I think Rachel Carlson would be proud of the progress we have made and continue to make to ensure that the world is a safer place for everyone. 

Earth Week Series: Imagine a Day Without Environmental Lawyers

Sigel

 

By Gabrielle Sigel, Co-Chair, Environmental and Workplace Health and Safety Law Practice

Earth Week
On this 52nd anniversary of Earth Day, I am not writing yet another, typically not very funny, riff on one of Shakespeare’s most famous lines.[1] Instead, I am inspired by one of the most popular of our blogs, written in 2017 by our talented former partner, E. Lynn Grayson, “Imagine a Day Without Water.” To start our Earth Week series of daily blogs by our firm’s EHS department, I offer words of hope and gratitude for the vast amount of work that has been done to improve and protect the environment – work done by lawyers, scientists, policy makers, and members of the public, to name a few.

Imagine what lawyers and scientists faced in 1970, the year of the first Earth Day. There was oppressive soot and polluted air throughout urban and industrial areas in the United States. The Cuyahoga River was so blighted it had caught fire. Although there was a new federal Environmental Protection Agency and two new environmental statutes – the National Environmental Policy Act and the Clean Air Act, one of the most highly complex and technical statutes ever written – both needed an entire regulatory structure to be created in order to be operationalized and enforced. This foundational work had to be done when there was not even an accepted method for determining, much less regulating, environmental and public health risk. Then two years later, in 1972, a comprehensively overhauled Clean Water Act was enacted, followed within the next decade by TSCA, RCRA, and CERCLA, to address the consequences of past waste and chemical use, and to control their future more prudently. Other laws were also passed in that time period, including the Safe Drinking Water Act and the Endangered Species Act.

Although Earth Day was created in the U.S. – the idea of Senator Gaylord Nelson (WI-D) and supported by Representative Pete McCloskey (CA-R) (both lawyers) and grass roots organizers – environmental consciousness also was growing worldwide. The 1972 Stockholm Declaration, from the first UN Conference of the Human Environment, recognized the importance of environmental protection amid the challenge of economic disparities. That work, including of the United Nations Environment Programme, led to the 1992 “Earth Summit” issuing the Rio Declaration on Environment and Development, which adopted a focus on sustainable development and the precautionary approach to protecting the environment in the face of scientific uncertainty, and creating the United Nations Framework Convention on Climate Change, which itself led to the 1997 Kyoto Protocol and the 2015 Paris Agreement, as well as other global efforts focusing on climate change and resource conservation.

Thus, within a split-second on our earth’s timeline, humans were able to tangibly improve and focus attention on the environment, through laws, agreements, governmental and private commitments, and public support. I note these developments, which were stimulated by lawyers on all sides, not to naively suggest that the global climate change, water accessibility, toxic exposure, and other environmental challenges that we face today can easily be solved, nor do I suggest that only lawyers can provide the solution. Instead, let’s take hope from the fact that in fewer years than the average for human life expectancy, there have been significant environmental improvements in our air, land, and water, and our collective focus on preserving the planet has been ignited.

These past efforts have improved the environment – not perfectly, but demonstrably. The legal structure that helped make these improvements happen has worked – not perfectly, but demonstrably. Hopefully, we will continue to work on these issues, despite their seeming intractability, under a system of national laws and global agreements. The alternative is too painful to contemplate.

Closing on a personal note, our firm’s Environmental Law Practice lost one of the best environmental lawyers in the profession, when Stephen H. Armstrong passed away last week. Steve was one of the first in-house environmental counsel I had the opportunity to work with when I began my focus on environmental law in the 1980s. He demonstrated how to respect the science, embrace the legal challenges, fight hard for your client, and always act with integrity. Although I was a young woman in a relatively new field, he consistently valued my opinions, supported my professional development, and with his deep, melodious laugh and sparkle in his eye, made working together feel like we shared a mission. And a ”mission” it was for him; I have never met any lawyer who cared more or wrestled harder about their clients’ position, while always undergirded by a deep reverence for doing the right thing. Once he joined our firm more than a decade ago, he continued being a role model for all of us. Our firm’s Environmental Law Practice, and all those who worked with him, will miss having him as a devoted colleague, friend, and mentor. Our earth has been made better for his life on it.

 

[1]“The first thing we do, let’s kill all the lawyers.” William Shakespeare, Henry VI, Part 2, Act Iv, Scene 2 (circa 1591).

U.S. EPA’s Addition of 1-BP to CERCLA Hazardous Substance List Likely Precursor to Similar Actions on PFAS

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

Epa

On April 8, 2022, U.S. EPA added the industrial solvent 1-bromopropane (1-BP) to its list of CERCLA hazardous substances; this listing was triggered by U.S. EPA’s decision to add 1-BP to the Clean Air Act’s list of hazardous air pollutants in January 2022. The addition of 1-BP to the Clean Air Act’s list of hazardous air pollutants may have come as a bit of a surprise since U.S. EPA hasn’t added a new pollutant to the hazardous air pollutant list since the list was originally promulgated in 1990. However, once on the Clean Air Act list of hazardous air pollutants, the pollutant automatically falls with the CERCLA definition of “hazardous substances”. In addition to adding 1-BP to the list of hazardous substances in Table 302.4 in the Code of Federal Regulations, U.S. EPA set a CERCLA reportable quantity for 1-BP at one pound (the CERCLA statutory default).

The manner in which U.S. EPA treats 1-BP at CERCLA sites may be illustrative as to how U.S. EPA will treat PFOS and PFOA, two PFAS compounds that are currently under consideration for listing as CERCLA hazardous substances. Will U.S. EPA add 1-BP to the CERCLA required analyte list at all Superfund sites or will U.S. EPA adopt a more selective approach by relying on Toxics Release Inventory (TRI) data to identify nearby sites or manufacturing facilities that may have used the industrial solvent? The more likely scenario is that U.S. EPA will utilize some screening criteria to determine whether to sample for 1-BP but how wide of a  1-BP net that U.S. EPA decides to cast remains to be seen.

1-BP is also a volatile substance so U.S. EPA could also rely on the new listing to reopen and investigate sites for potential vapor intrusion concerns. However, it is unlikely that a site would be reopened solely on the basis of 1-BP vapor intrusion risks.

We will continue to track how U.S. EPA elects to address 1-BP at Superfund sites in an effort to gain insight as to how U.S. EPA may approach future hazardous substance designations at the Corporate Environmental Lawyer.

The SEC’s Proposed Climate-Related Disclosure Rules: Are They the “Core Bargain,” a “Watershed Moment,” or “Undermin[ing] the Existing Regulatory Framework”?

May Riely Sigel Greubel Kim

By Alexander J. MayCharles D. RielyGabrielle SigelMichael R. Greubel, and TaeHyung Kim

Earlier this week, the Securities and Exchange Commission (“SEC”) approved the issuance of proposed new disclosure rules [cited as “PR, p. __”], titled The Enhancement and Standardization of Climate-Related Disclosures for Investors, that would require both domestic and foreign public companies to provide certain climate-related information in their registration statements and annual reports and certain ongoing updates in their quarterly reports. The long-awaited proposed rules are the SEC’s most direct move yet to transform disclosure requirements related to Climate and ESG issues and passed only after what appears to have been significant internal debate. The SEC’s lone Republican Commissioner, Hester M. Peirce, dissented from the proposed rule, and the Chair and the other two Democratic commissioners released statements in support of the proposed rules. Their accompanying statements previewed the wide range of debate—in the courts, political sphere, and public discussion—destined to accompany these rules through the likely lengthy administrative process before (or if) they become final. 

This Client Alert previews the disclosure obligations for public companies if the proposed rules are ultimately adopted, summarizes the ongoing debate about the wisdom of the proposed changes and previews the potential legal challenges to the proposed rule. For additional details regarding the proposed amendments, the SEC has posted a press release summarizing the proposal and public comment period, a fact sheet, and the text of the proposed amendments.

I. Summary of Proposed Disclosure Requirements

The SEC emphasized that its goal in proposing the rules was to enhance and standardize climate-related disclosures for investors. To do so, the SEC would impose a number of new and enhanced disclosure requirements for public companies. These new proposed disclosure requirements include information about a company’s climate-related risks (and opportunities) that are reasonably likely to have a material impact on its business or consolidated financial statements, as well as disclosure of the company’s Scopes 1 and 2 (direct and indirect) greenhouse gas (“GHG”) emissions, regardless of their materiality, and Scope 3 GHG emissions if material or relied upon by the company. The SEC also proposed new rules that would require companies to disclose certain climate-related financial metrics in their audited financial statements and information about the company’s internal governance with respect to climate-related issues. 

A. Climate-Related Disclosures

The proposed new Item 1500 of Regulation S-K would require registrants to disclose certain climate-related information ranging from governance, business strategy impact and risk management of climate-related risks, to GHG emissions and climate-related goals and targets. “Climate-related risks” are defined as “the actual or potential negative impacts of climate-related conditions and events on a registrant’s consolidated financial statements, business operations, or value chains, as a whole.”  PR, p. 61. Those risks include both acute and chronic “physical risks,” such as extreme weather events and longer-term decreased availability of water supply, as well as “transition risks,” defined as “risks related to a potential transition to a lower carbon economy.” PR, pp. 61-62. The disclosure required by Item 1500 of Regulation S-K must be included in the domestic company’s registration statements and annual report on Form 10-K, and material updates are required to be provided in Form 10-Q. Broadly, the categories of required information include:

Governance and oversight: Board of directors’ oversight of climate-related risks and, if applicable, opportunities; management’s role in assessing and managing climate-related risks and if applicable, opportunities.[1]

Strategy, business model, and outlook: 

- Climate-related risks (and opportunities) reasonably likely to have a material impact, including on the company’s business or consolidated financial statements and business activities, which may manifest over the short, medium, and long term, with each registrant defining how many years are encompassed within each of those terms.

- Actual and potential impacts of any climate-related risks on the company’s strategy, business model, and outlook, including the time horizon of such impact.

- Whether and how any such impacts are considered as part of the company’s business strategy, financial planning, and capital allocation.

- Whether and how any identified climate-related risks have affected, or are reasonably likely to affect, the company’s consolidated financial statements.

- Information on the company’s internal carbon price, if available, but the use of a carbon price is not required.

- Resilience of the company’s business strategy considering potential future changes in climate-related risks. If the registrant utilizes a scenario analysis to assess the impact of climate-related risks on its business and financial statements, and to support the resilience of its strategy and business model, companies must disclose the scenarios considered, providing both qualitative and quantitative information.

Risk management: 

- The company’s processes for identifying, assessing, and managing climate-related risks (and opportunities).

- Whether and how any such processes are integrated into the company’s overall risk management system or processes.

- The company’s transition plan as part of its climate-related risk management strategy, if applicable.

Targets and goals: If the company has set any targets or goals related to GHG emissions reduction, or any other climate-related target or goal, it must provide information on the scope of activities and emissions included in the target, unit of measurement, time horizon, baseline targets, interim targets, and strategy for meeting the target or goal. 

- If carbon offsets or renewable energy credits (“RECs”) have been used as part of the company’s plan to achieve climate-related targets or goals, the company must disclose certain information including carbon reduction from such offsets or RECs and related costs.

Continue reading "The SEC’s Proposed Climate-Related Disclosure Rules: Are They the “Core Bargain,” a “Watershed Moment,” or “Undermin[ing] the Existing Regulatory Framework”?" »

U.S. EPA Releases “ECHO Notify” to Increase Public Awareness of Enforcement Related Information

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

Echo

On March 22, 2022, U.S. EPA released a new web tool designed to ensure that information regarding environmental violations and enforcement actions is more readily available to the public. The new tool, called ECHO Notify, allows users to sign up for weekly emails when new information is available with respect to violations of environmental statutes or enforcement actions in a specific geographic area or with respect to a particular facility. 

ECHO Notify provides information on both state and federal enforcement and compliance activities under the following programs: Clean Air Act (stationary sources), Clean Water Act (point sources), Resource Conservation and Recovery Act (hazardous waste handlers), and Safe Drinking Water Act (public water system). The tool provides U.S. EPA-specific enforcement-related information with respect to other environmental statutes. 

In a press release that accompanied the release of the new tool, U.S. EPA Administrator Michael Regan stated that “EPA is committed to empowering communities with the information they need to understand and make informed decisions about their health and environment.” Administrator Regan went on to state “EPA has developed ECHO Notify so that finding updates on environmental enforcement and compliance activities is as easy as checking your email.” 

This new tool is another example of U.S. EPA’s continued focus on environmental justice communities and its desire to ensure that information regarding environmental compliance and enforcement activities is readily available to those communities. We will continue to provide updates regarding U.S. EPA initiatives at the Corporate Environmental Lawyer.

SEC’s Upcoming Proposed Rule for Climate Disclosures: Will It Be as “Decision-Useful” as the Ingredients Label for “Fat-Free Milk”?

Sigel RielyBy Gabrielle Sigel, Partner and Co-Chair, Climate and Clean Technology Practice, and Charles D. Riely, Partner, Investigations, Compliance, and Defense Practice

The Securities and Exchange Commission (“SEC”) is meeting this Monday, March 21, to determine whether to propose amendments to existing law to “enhance and standardize registrants’ climate-related disclosures.” The SEC’s expected proposed rule is more than a decade in the making and would be the SEC’s most visible step yet to pursue disclosure improvements related to Climate and ESG issues. While speculation on what the SEC will announce runs rampant, the SEC itself has given a few clues as to what to expect. This article traces the history of the SEC’s focus on climate related disclosures and highlights the most important recent developments that could highlight a possible approach. As detailed below, the SEC’s goal is to making disclosures “consistent,” “comparable” and “decision-useful.” 

The 2010 Guidance

In early 2010, the SEC issued “Guidance Regarding Disclosure Related to Climate Change.” This interpretive release advised companies of the “existing disclosure requirements” with respect to climate change. The guidance noted that while there were increasing legislative and executive actions with respect to climate, a registrant would be required to file would be governed existing rules and law. With respect to climate-related impacts, companies would be required to disclose “such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.” The SEC recommended that companies consider the positive and negative impacts of US and international legislation, regulation, and accords and other legal, technological, political and scientific developments, as well as the physical impacts of climate change, such as severe weather events. The guidance concluded by referring further evaluation of this issue to the SEC’s Investor Advisory Committee.

Democratic Commissioners Call for Climate-Related Disclosure in 2019

The issue of mandated climate-related disclosures remained primarily on the sidelines until the two democratic commissioners, Robert J. Jackson Jr. and Allison Herren Lee, raised the issue in 2019. When the Commission as a whole proposed revisions to Regulation S-K (which requires disclosure of specific material, qualitative material) without addressing climate change, Jackson and Lee issued a statement making their views clear. The statement decried the revised amendment’s “absence of [guidance] on the topic of climate risk.” They concluded that “what is clear is that investors of all kinds view [climate] risk as an important factor in their decision-making process, and that “research shows that we are long past the point of being unable to meaningfully measure a company’s sustainability profile.” 

The SEC’s Early 2021 Emphasis on Climate and ESG Issues

After becoming Acting Chair in January 2021, Lee continued to proactively seek additional climate-related disclosures. In February 2021, she directed the SEC staff to review climate-related disclosures, and then in March 2021, she announced a Climate and ESG Task Force as part of the Division of Enforcement to focus on material misstatements or omissions relating to climate risk disclosures, and “beyond climate,” on the “the broader array of ESG disclosure issues.” On March 15, 2021, Acting SEC Chair Lee issued a formal request for public comment on a potential rule, with fifteen “Questions for Consideration,” and soliciting comments on how the SEC can “best regulate climate change disclosure.”  

Recent Developments Highlighting Possible Approach

The SEC’s request for comments generated over 6,000 comments (including many form letters that were re-submitted). In  initial response to the public input, SEC Chair Gary Gensler stressed, in July 2021 and again in September 2021 and December 2021, that climate risk disclosures must be “consistent,” “comparable,” and “decision-useful,” including providing sufficient detail that the investor understands the bases for a company’s disclosure and for investment funds describing themselves as “sustainable” or “green.”

In September 2021, SEC staff in its Division of Corporation Finance published a sample letter that companies may receive based on existing rules and the 2010 Climate Change guidance. This letter would ask the receiving company to explain the lack of climate-related disclosure issues, such as:

  1. An explanation as to why the company provided a “more expansive disclosure in its corporate responsibility report” than in its SEC filings.
  2. The material effects of transition risks related to climate change.
  3. The effects of significant developments in international accords and federal and state legislation and regulation on the business.
  4. To the extent material, the indirect consequences of climate-related regulation or business trends.
  5. The material effect of physical effects of climate change, including severe weather and fires and water availability.
  6. The material effect of purchase or sale of carbon credits or offsets.

Most recently and perhaps most tellingly, Chairman Gensler’s March 3, 2022 appearance on his “Office Hours” YouTube video, explained that he wants investors to understand and be able to compare ESG disclosures as easily as a consumer in a grocery store can understand and compare the ingredients in different brands of fat-free milk. While over-simplifying the issues, the Office Hours video demonstrates that the Chairman is committed to his basic goal of “consistent,” “comparable,” and “decision-useful” disclosures regarding climate impacts. The March 21, 2022 meeting will demonstrate how close he came to these high aspirations.

U.S. EPA Announces Plan to Tighten PFAS Reporting Requirements

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

EpaIn connection with the release of its 2020 Toxics Release Inventory (TRI) National Analysis that evidenced a 10% decline in environmental releases of TRI chemicals between 2019 and 2020, U.S. EPA announced that it intends to initiate a rulemaking that will, among other things, remove the de minimis exemption for reporting the 172 per- and polyfluoroalkyl substances (PFAS) that were added to TRI by the 2020 National Defense Authorization Act. 

The TRI analysis report noted that 38 facilities reported managing 800,000 pounds of PFAS in 2020 but only 9,000 pounds of PFAS were reported as having been released. In response to what U.S. EPA claims to be a “seemingly limited scope of PFAS reporting”, U.S. EPA stated that it intends to “use existing data to generate lists of potential productions and recipients of PFAS waste, and has contacted facilities with potential reporting errors, as well as those that were expected to report but did not.” In addition, U.S. EPA claims that “the elimination of the de minimis exemption will result in a more complete picture of [PFAS] releases and other waste management quantities for these chemicals."

The de minimis exemption, which allows covered facilities to disregard certain minimal levels of listed toxic chemicals in mixtures or trade name products, has been strongly criticized by a number of environmental groups. The de minimis level for perfluorooctanoic acid is 0.1% and for all other TRI-listed PFAS is 1.0%. Litigation is currently pending in the U.S. District Court for the District of Columbia challenging U.S. EPA’s inclusion of the de minimis PFAS reporting threshold and this rulemaking may be an effort by U.S. EPA to respond to that litigation. 

We will continue to provide updates on U.S. EPA’s efforts to strip the de minimis TRI reporting exemption for PFAS as well as other PFAS-related issues on the Corporate Environmental Lawyer blog.

U.S. EPA Finalizes Fifth UCMR—PFAS Remain in the Regulatory Bullseye

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

EpaOn December 20, 2021, U.S. EPA finalized its Fifth Unregulated Contaminant Monitoring Rule (UCMR) that will require public water systems (PWS) to collect monitoring data for 29 per- and polyfluoroalkyl substances (PFAS) and lithium in drinking water. Every five years, the Safe Drinking Water Act (SDWA) requires U.S. EPA to publish a new list of unregulated contaminants that will be monitored by PWS.  UCMR 5 focuses almost exclusively on PFAS and targets 29 of the more than 4,700 PFAS that have been identified to date. 

Starting in 2023, all PWSs serving more than 10,000 customers are obligated to monitor for these UCMR 5 contaminants while smaller PWSs (those serving less than 10,000 customers) must monitor subject to availability of appropriations (U.S. EPA is responsible for all analytical costs associated with PWSs serving less than 10,000 customers) and laboratory capacity. In response to comments on the draft UCMR 5 expressing concern about the lack of laboratory capacity to support the PFAS monitoring, the final rule notes that U.S. EPA expects laboratory capacity to quickly grow to meet UCMR demand. The final rule identifies applicable U.S. EPA test methods for each of the 29 targeted PFAS compounds. However, some commenters were critical that the final rule did not identify a testing technique to determine “total PFAS” in drinking water. The final rule acknowledges this issue but notes that U.S. EPA “has not identified a complete, validated peer-reviewed aggregate PFAS method” at this time. 

The data collected is expected to inform U.S. EPA as it evaluates whether to set a specific drinking water limit or treatment standard under the SDWA for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS). U.S. EPA has committed to establishing a national drinking water regulation for PFOA and PFOS by the fall of 2023 and it is likely that additional PFAS will be in the SDWA regulatory pipeline in the near future. 

We will continue to track U.S. EPA regulatory agenda at the Corporate Environmental Lawyer blog.

New PFAS Additions to the Proposition 65 List

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

OEHHAOver the past week, several new per- and polyfluoroalkyl substances (PFAS) have been added to California’s Proposition 65 list. In March 2021, California’s Office of Environmental Health Hazard Assessment (OEHHA) selected perfluorooctane sulfonate (PFOS) and its salt and transformation and degradation precursors for evaluation by California’s Carcinogenic Identification Committee (CIC). OEHHA also selected perfluoronanoic acid (PFNA) and perfluoroundecanoic acid (PFDA) for evaluation by California’s Reproductive Toxicant Identification Committee (DARTIC). 

Several industry groups submitted comments in opposition to adding these PFAS chemicals to the Proposition 65 lists. For example, even though PFOS has been voluntarily phased out of production in the United States, the American Chemistry Council opposed listing PFOS as a carcinogen under Proposition 65, claiming that the available data doesn’t support a conclusion that PFOS presents a carcinogenic risk to humans. 

Notwithstanding this industry opposition, on December 6, 2021, the CIC voted 8-2 with one abstention to add perfluorooctane sulfonate (PFOS) and its salt and transformation and degradation precursors to the Proposition 65 list of chemicals known to the State of California as causing cancer. It is important to note that PFOS had previously been on the Proposition 65 list due to its alleged reproductive toxicity. 

On December 14, 2021, DARTIC voted to add PNFA to the Proposition 65 list of reproductive toxicants. However, DARTIC did not add PFDA to the list of reproductive toxicants. DARTIC relied in part on a recent assessment prepared by OEHHA that evaluated the reproductive effects of both PFNA and PFDA. 

Unlike PFAS, these particular PFAS chemicals have not been phased out and are used as processing aids in fluoropolymer manufacturing as well as in certain cosmetic products. As such, the inclusion of these chemicals on the Proposition 65 list will trigger new warning obligations.   

Once a chemical is added to the Proposition 65 list, companies have one year to provide the requisite Proposition 65 warnings and companies that fail to provide these warning are often the target of “claims” by private party Proposition 65 enforcers. It should also be noted that OEHHA has yet to develop “safe harbor” levels for any of these PFAS chemical and so any exposure to these PFAS chemicals will require a Proposition 65 warning. 

These particular PFAS chemicals are commonly found in firefighting foam, stain-resistant fabrics, and food packaging. Companies that distribute and sell these types of products in California would be well served to evaluate whether their products contain any of these chemicals and take steps to either eliminate these chemicals from their products or ensure that the products have the requisite Proposition 65 warnings in the next year. 

We will continue to provide updates regarding Proposition 65 at the Corporate Environmental Lawyer blog.

U.S. EPA Releases its PFAS Strategic Roadmap

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

EpaOn Monday, October 18, 2021, U.S. EPA released its PFAS Strategic Roadmap (Roadmap) outlining the agency’s three-year strategy for addressing per- and polyfluoroalkyl substances (PFAS). The Roadmap acknowledges that U.S. EPA cannot solve the problem of “forever chemicals” by tackling only one route of exposure or one use at a time. Instead, the Roadmap outlines a multi-pronged approach with specific emphasis on the following:

  • Accounting for the full lifecycle of PFAS, their unique properties, the ubiquity of their uses, and the multiple pathways for exposure;
  • Focusing on preventing PFAS from entering the environment in the first instance which is a foundational step in reducing the exposure and risks of PFAS contamination;
  • Holding polluters accountable for releases of PFAS into the environment;
  • Investing in scientific research to fill gaps in understanding PFAS to drive science-based decision making; and
  • Ensuring that disadvantaged communities have equitable access to solutions. 

In order to achieve these objections, U.S. EPA’s Roadmap identifies the following specific agency actions:

  • U.S. EPA’s Office of Chemical Safety and Pollution Prevention commits to:
    • Publish a national PFAS testing strategy to generate toxicity data on PFAS compounds (Fall 2021);
    • Ensure robust TSCA review for new PFAS chemical submissions (ongoing);
    • Review previous TSCA regulatory decisions to ensure that the those decisions were sufficient protective of human health and the environment (ongoing);
    • Enhance PFAS reporting under the Toxics Release Inventory (Spring 2022); and
    • Finalize new PFAS reporting under TSCA Section 8 (Winter 2022).
  • U.S. EPA’s Office of Water commits to:
    • Finalize the Fifth Unregulated Contaminants Monitoring Rule to require testing for 29 PFAS substances (Fall 2021);
    • Establish an MCL for PFOA and PFOS (Fall 2023);
    • Finalize the toxicity assessments for GenX and five additional addition PFAS compounds (Fall 2021);
    • Publish health advisories for GenX and PFBS (Spring 2022);
    • Set Effluent Limitations Guidelines to restrict PFAS discharges nine different industrial categories (2022); and
    • Leverage the National Pollutant Discharge Elimination System (NPDES) program to reduce the discharges of PFAS and obtain more comprehensive information on PFAS discharges (Winter 2022).
  • S. EPA’s Office of Land and Emergency Management commits to:
    • Designate PFOA and PFOS as CERCLA hazardous substances (Summer 2023);
    • Evaluate designation of other PFAS compounds as CERCLA hazardous substances (Spring 2022);  and
    • Issue updated guidance on the destruction of PFAS and PFAS-containing materials (Fall 2023). 

In addition to U.S. EPA’s Roadmap, the White House announced ongoing efforts by the following seven agencies to address PFAS pollution: the White House Council on Environmental Quality (CEQ), the Departments of Defense, Agriculture, Homeland Security, and Health and Human Services, Food and Drug Administration, and the Federal Aviation Administration. We will continue to track these ongoing efforts to regulate PFAS at the Corporate Environmental Lawyer blog.

California Law Adds New Restrictions on Recyclability Claims

Torrence_jpgBy Allison A. Torrence

Chasing arrowsOn October 5, 2021, California Governor Newsom signed SB 343, addressing recyclability claims on products and in advertising. The Act amends existing sections of California’s Business and Professions Code as well as the Public Resource Code relating to environmental advertising. These laws collectively provide California’s version of recyclability consumer protection laws, similar to but going beyond the Federal Trade Commission Guides for the Use of Environmental Marketing Claims (“Green Guides”).

Prior to SB 343, existing California law made it unlawful for any person to make any untruthful, deceptive, or misleading environmental marketing claim, and required that environmental marketing claims be substantiated by competent and reliable evidence. Additionally, a person making any recyclability claims was required to maintain written records supporting the validity of those representations, including whether, the claims conform with the Green Guides.

Those requirements are generally left intact, with additional obligations added by SB 343. The first big change made by SB 343 is to specifically add the use of the chasing arrow symbol as a way that a person might make a misleading environmental marketing claim in marketing or on a product label. (Business and Professions Code § 17580(a).) Next, SB 343 requires the Department of Resources Recycling and Recovery, by January 1, 2024, to update regulations requiring disposal facilities to provide information on recycling data. Based on the information published by the department, a product or packaging is considered recyclable only if the product or packaging is collected for recycling by recycling programs for jurisdictions that collectively encompass at least 60% of the population of the state. (Public Resources Code § 42355.51(d)(2).) The new law also provides additional criteria related to curb-side recycling, that grow more stringent over time, and PFAS content of plastic material, among other provisions. (Public Resources Code § 42355.51(d)(3).) A person making recyclability claims must keep written records of whether the consumer good meets all of the criteria for statewide recyclability pursuant to these new provisions. (Business and Professions Code § 17580(a)(6).)

Recycling-symbol-for-type-1-plastics_2673Finally, while existing California law governed what resin identification code could be placed on plastic containers (i.e., #1 PETE, #2 HDPE), SB 343 states that resin identification code numbers cannot be placed inside a chasing arrows symbol unless the rigid plastic bottle or rigid plastic container meets the new statewide recyclability criteria discussed above. (Public Resources Code § 18015(d).)

This new law is another hurdle facing companies making environmental marketing claims. For companies selling products in California, it is not sufficient to simply follow the FTC Green Guides. Instead, companies must be aware of the specific nuances and requirements in California and developments in other states.

The Need to Be Green: Focus on Environmental Sustainability Can Inure to Bottom Line for Cannabis Industry

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice 

A recent article published in Politico highlights some of the potential impacts of cannabis production on the environment.   As the production of cannabis accelerates across the United States, it is becoming increasingly likely that the environmental impacts of cannabis production will become more regulated especially in the areas of energy use and water reliance.   Cannabis companies would be well served to ensure that they have effective environmental management strategies in place to not only ensure continued compliance but also to reduce the companies’ environmental footprint that could in turn result in significant cost savings.   

For example, according to the article, a typical growing operation can consume up to 2,000 watts of electricity per square meter for indoor growing operations as compared to 50 watts of electricity for growing other leafy greens such as lettuce.  According to a recent study, at least one expert estimates that cannabis production accounts for about one percent of electricity consumption in the United States.  Depending on the source of electricity, greenhouse gas emissions may be generated in the course of energy production that could be attributable to the cannabis operation’s carbon footprint.  President Biden is focused on reducing greenhouse gas emissions and one the key focus industries for President Biden is the agricultural industry.  Implementing an energy efficiency program with a focus on renewable energy sources may allow cannabis companies to be better positioned to comply with future regulations while at the same time reducing overall energy costs.       

Although not discussed in the article, cannabis production can be a fairly water intensive process with some studies estimating usage as high as six gallons per plant.  A recent study concluded that by 2025, total water use in the legal cannabis market is expected to increase by 86%.  As water scarcity issues become more prevalent especially in light of the changing climate, ensuring adequate sources of water will be critical to ensuring the ability to continue to grow cannabis plants.  At the same time, adopting effective water conservation procedures will allow facilities to reduce their environmental footprint with resulting cost savings. 

For more detailed insight on these issues, please click here for an article that was recently published in the Cannabis Law Journal. 

Great Lakes Cleanup Part of Infrastructure Package?

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BSteven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice 

GLRIAs part of the infrastructure package that was just approved on a bi-partisan basis by the Senate and is now moving on to the House, the Great Lakes Restoration Initiative (“GLRI”) could receive approximately $1 billion for the remediation of impacted site and waterways in the Great Lakes region.   

Since its inception in 2010, the GLRI has provided funding to 16 federal organizations to strategically target the biggest threats to the Great Lakes ecosystem and to accelerate progress toward achieving long term goals:

  • Fish safe to eat;
  • Water safe for recreation;
  • Safe source of drinking water;
  • All Areas of Concern delisted;
  • Harmful/nuisance algal blooms eliminated;
  • No new self-sustaining invasive species;
  • Existing invasive species controlled; and
  • Native habitat protected and restored to sustain native species.

One of the primary areas of focus of GRLI’s most recent action plan is the remediation of “Areas of Concern” (“AOCs”) that are defined as "geographic areas designated by the Parties where significant impairment of beneficial uses has occurred as a result of human activities at the local level."  There are currently more than 26 AOCs in the Great Lakes basin that could be cleaned up using monies appropriated in the current version of the infrastructure bill. 

We will continue to track the progress of the infrastructure bill and the availability of funds to address AOCs in the Great Lake basin at the Corporate Environmental Lawyer.

EPA to Revise or Replace Trump-Era Clean Water Act Rules, But Will Leave Existing Rules In Place For Now

Torrence_jpgBy Allison A. Torrence

1200px-Seal_of_the_United_States_Environmental_Protection_Agency.svgThe 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.

California’s COVID-19 Workplace Safety Standard May Be Revised on Short Notice

Song
By Leah Song

Calosha

On May 20, 2021, the California Occupational Safety and Health Standards Board (“Board”) held a public meeting to consider revisions to the State’s COVID-19 emergency temporary standard (“ETS”), which had been the applicable law for California workplaces since November 30, 2020.  (See December 1, 2020 Corporate Environmental Lawyer blog).  On May 7, 2021, the California Division of Occupational Safety and Health (“Cal/OSHA”) issued a notice of emergency action regarding proposed revisions to the ETS for the Board to consider for adoption, given the developing science around COVID‑19, particularly the impact of vaccines and Cal/OSHA’s experience enforcing the ETS. However, on May 19, 2021, Cal/OSHA asked the Board to table its vote on Cal/OSHA’s May 7 proposed COVID-19 ETS revisions.

Given Cal/OSHA’s May 7 proposed revisions to the ETS included notable revisions changing definitions, masking and physical distancing requirements, and engineering controls, including distinctions based on whether employees were vaccinated. However, on May 13, 2021, the Centers for Disease Control and Prevention (“CDC”) posted its guidance for fully vaccinated people recommending, in part, that “fully vaccinated people no longer need to a mask or physically distance in any setting, except where required by federal, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance.” CDC, Guidance for Fully Vaccinated People (May 13, 2021).  In light of that new guidance, and the science that the risk is low that vaccinated people transmit the virus, Governor Newsom announced that the state will implement the new CDC mask guidelines on June 15, 2021, along with fully reopening the economy.  In addition, California Health and Human Services Secretary Dr. Mark Ghaly announced on May 17, 2021 that, starting on June 15, 2021, “California plans to implement the CDC’s guidelines around masking to allow fully vaccinated Californians to go without a mask in most indoor settings.” However, California Department of Public Health issued a directive on May 21, 2021, that adopted the CDC guidance, but also stated that, with respect to COVID-19 protections, employers remain subject to the ETS, as applicable to their business.

On May 19, 2021, the day before the Board meeting, Cal/OSHA sent a memo recommending that the Board not vote on its May 7 proposed revisions, because it “believes it is important to revisit the proposed COVID-19 prevention emergency regulations in light of this new [CDC] guidance.”  In the memo, Cal/OSHA stated that it will “limit any potential changes to consideration of the recent [CDC] guidance” regarding fully vaccinated people. On May 20, 2021, after hearing hours of public comment, the Board voted to table Cal/OSHA’s May 7 changes and to allow it to post, by May 28, 2021, its new proposed changes to the ETS for public comment. The Board will vote on June 3, 2021 in a special meeting as to whether to adopt the new Cal/OSHA proposed changes or to take other action on the ETS. 

Jenner & Block’s Corporate Environmental Lawyer will continue to update on the California COVID-19 ETS and other COVID-19 matters as they unfold.  Additional information regarding working during the COVID‑19 pandemic can be found on this blog and in Jenner & Block’s COVID‑19 Resource Center.