DOE Final Rule Seeks to Streamline NEPA Review of LNG Projects
By Steven M. Siros, Co-Chair, Environmental and Workplace Health and Safety Law Practice
The Trump administration continues its efforts to issue new regulations in advance of January 20, 2021, with the Department of Energy (DOE) issuing a final rule that will exempt certain liquefied natural gas (LNG) projects from National Environmental Protection Act (NEPA) review. The final rule, published in the Federal Register on December 4, updates DOE’s NEPA implementing procedures with respect to authorizations issued under the Natural Gas Act in accordance with the recent revisions to the NEPA regulations as further described below.
According to DOE, the focus of the new rule is to clarify the scope of DOE’s NEPA obligations with respect to LNG projects and more specifically, to eliminate from the scope of DOE’s NEPA review potential environmental effects that the agency has no authority to prevent. Because DOE’s discretionary authority under Section 3 of the Natural Gas Act is limited to the authorization of exports of natural gas to non-free trade agreement countries, the rule limits the scope of environmental impacts that DOE must consider to the impacts associated with the marine transport of the LNG commencing at the point of export.
To that end, the final rule revises DOE’s existing Categorical Exclusions (CATEX) to reflect that the only elements of LNG projects subject to NEPA review is the following:
B5.7 Export of natural gas and associated transportation by marine vessel.
Approvals or disapprovals of new authorizations or amendments of existing authorizations to export natural gas under section 3 of the Natural Gas Act and any associated transportation of natural gas by marine vessel.
Based on prior NEPA reviews and technical reports, DOE has determined that the transport of natural gas by marine vessel normally does not pose the potential for significant environmental impacts and therefore qualifies for a CATEX. As such, the only reason that DOE would be obligated to engage in a NEPA review of a LNG project would be if “extraordinary circumstances” were deemed to be present that could not be mitigated and therefore would preclude DOE's reliance on this CATEX.
The revised CATEX also removes the reference to import authorizations from CATEX B5.7 because DOE has no discretion with respect to such approvals. Finally, the final rule also removes and reserves CATEX B5.8 and classes of actions C13, D8, D9 because these actions are outside of the scope of DOE’s authority or are covered by the revised CATEX B5.7.
Interestingly, although the Federal Energy Regulatory Commission (FERC) has responsibility for approving the construction of LNG export terminals, it has previously declined to analyze the greenhouse emissions associated with such projects, noting that DOE is the appropriate agency to consider such impacts. However, with DOE now concluding that these projects are categorically excluded from such reviews, it remains to be seen if FERC will reconsider its approach to these operations.
The final rule is scheduled to take effect on January 4, 2021 and it remains to be seen what if any action a new Biden administration might take in response to this rule. Assuming that the Republicans retain control of the Congress, DOE would be required to go through the formal withdrawal process. Alternatively, if the Democrats take control of the Senate, the regulation could be repealed pursuant to the Congressional Review Act.
We will continue to track the Trump administration’s ongoing effort to finalize regulations in advance of January 20th as well as efforts by any new administration to rollback these regulations on the Corporate Environmental Lawyer.
Lawsuit Filed Challenging DOJ’s Policy on Supplemental Environmental Projects
By Steven M. Siros
On October 8, 2020, the Conservation Law Foundation filed a lawsuit challenging a DOJ policy that barred the use of supplemental environmental projects (SEPs) in federal enforcement settlements with private parties. SEPs have been used since the 1980s and typically involve a project intended to provide some tangible environmental or public health benefit that could not necessarily be compelled by U.S. EPA.
DOJ, in a March 12, 2020 memorandum, announced that it was terminating its policy of allowing companies to agree to perform SEPs in exchange for reductions in civil penalties in environmental enforcement settlements. According to DOJ, the practice of using SEPs in lieu of civil penalties violates the Miscellaneous Receipts Act, a statute that prevents cash from legal settlements being diverted from the Treasury to third parties. As further described in the March 2020 DOJ memorandum, DOJ claims that the SEPs basically substitute payments to third parties for payments to the Treasury, circumventing Congress’ Constitutional power of the purse.
The lawsuit claims that DOJ’s conclusion that the use of SEPs violates the Miscellaneous Receipts Act is arbitrary and capricious and otherwise lacks reasoned decision-making. The lawsuit highlights U.S. EPA’s history of using SEPs and its various guidance documents encouraging the use of SEPs in environmental enforcement matters. The lawsuit asks that the Court declare that DOJ’s March 2020 memo violates the Administrative Procedures Act, vacate the memo, and enjoin DOJ from implementing or relying on the memo in the future. .
We will continue to provide updates on this lawsuit as well as other important environmental, health and safety issues on Jenner & Block’s Corporate Environmental Lawyer Blog.
Supreme Court Grants Review on Key Climate Change Case
By Matthew G. Lawson
On Friday, October 2, 2020, the United States Supreme Court granted a writ of certiorari to review of a decision by the Fourth Circuit Court of Appeals holding that climate change litigation brought against various fossil fuel were not subject to federal court subject matter jurisdiction. While the Supreme Court’s review is limited to a somewhat narrow, jurisdictional question regarding the ability of an appellate court to review a district court’s order remanding a case to state court, the decision will likely have far reaching impacts on whether the growing number of climate changes cases in the United States will be litigated in state or federal courts.
As previously discussed by the Corporate Environmental Lawyer, the underlying litigation involves claims asserted in Maryland state court by the City of Baltimore against various fossil-fuel companies for damages associated with Climate Change. In its complaint, Baltimore asserted claims against the industry for public nuisance, private nuisance, strict liability failure to warn, strict liability design defect, negligent design defect, negligent failure to warn, trespass, and violations of Maryland’s Consumer Protection Act.
In response, the fossil fuel companies sought to remove the action to federal court. However, the district court remanded the case back to state court after finding that it lacked subject matter jurisdiction over the asserted claims following the lead of several other district courts that have decided similar issues. On March 6, 2020, the Fourth Circuit affirmed the district court’s remand order. Importantly, the Fourth Circuit found that its appellate jurisdiction was limited to reviewing the district court’s conclusion that it lacked subject matter jurisdiction under the Federal-Officer Removal Statute pursuant to 28 U.S.C. § 1447(d) and 28 U.S.C. § 1442 notwithstanding that the fossil fuel companies had raised and the district court ruled on additional arguments in support of the removal petition. The Fourth Circuit found that it lacked jurisdiction to consider whether the district court should have granted removal to federal court on these alternative grounds.
With respect to the Federal Officer Removal Statute, the Fourth Circuit rejected the companies’ arguments that the case belonged in federal court because the companies had entered into fuel supply and strategic petroleum reserve agreements with the federal government. The court concluded that these contractual agreements failed to establish that the companies were “acting under” the direction of a federal officer and were “insufficiently related” to Baltimore’s claims. On March 31, 2020, the fossil-fuel companies filed a petition for a writ of certiorari in the United States Supreme Court, seeking review of the question of whether the statutory provision prescribing the scope of appellate review of remand orders “permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court…” The companies argued that the Fourth Circuit had improperly ignored several alternative grounds justifying removal of the case to federal court, including that federal common law governs claims of interstate air pollution.
While the Supreme Court’s review of the case will be limited to the appellate jurisdictional question, the decision will undoubtedly influence the growing trend of climate change litigation. At present, twenty-one U.S. States and numerous municipalities have brought lawsuits in state court against the fossil fuel industry for damages related to climate change. In nearly all such cases, the industry has sought to remove the case to federal court where it is believed the companies have a better chance of successfully securing dismissals on the grounds that such claims are preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. Thus, the Supreme Court’s decision will likely impact the ability of the fossil fuel industry to seek appellate review of unfavorable district court remand orders.
EPA Finalizes Rollback of Obama-Era Methane Regulations for the Oil and Natural Gas Industry
By Allison A. Torrence
On August 13, 2020, EPA issued two final rules that will have a significant impact on methane emissions, a potent greenhouse gas. The final rules were issued under the Clean Air Act’s New Source Performance Standards (“NSPS”) for the oil and natural gas industry and rescind Obama-era rules issued in 2012 and 2016. EPA categorized the two new rules as (1) Policy Amendments and (2) Technical Amendments.
Key provisions from these two rules include the following:
- Policy Amendments:
- Removes the natural gas transmission and storage segment of the oil and natural gas industry from regulation.
- Rescinds methane and volatile organic compounds (“VOCs”) emissions standards for the natural gas transmission and storage segment of the oil and natural gas industry.
- Rescinds methane emissions standards for the production and processing segments of the oil and natural gas industry and finds that EPA is no longer required or authorized to issue emission guidelines for methane from existing sources in the industry’s production and processing segments.
- Finds that the Clean Air Act requires, or authorizes, EPA to make a “significant contribution finding” as a predicate to regulating any air pollutant that was not considered when EPA first listed or regulated an industry “source category.”
- Technical Amendments:
- Reduces the frequency of required fugitive emissions monitoring for gathering and boosting compressor stations from quarterly to twice a year and exempts low-production wells from fugitive monitoring requirements altogether.
- Reduces the recordkeeping and reporting requirements of the fugitive emissions program.
- Changes include allowing owners and operators to determine the best means to ensure all components are monitored, rather than having to include a site map and an observation path in the monitoring plan.
- Updates fugitive emissions repair requirements.
- Provides additional technical updates covering fugitive emissions monitoring and repairs, alternative means of emissions limitations, pneumatic pumps, engineer certifications for closed vent systems, and storage vessels.
As we discussed on this Blog previously, these rules were originally proposed on August 28, 2019. EPA held public hearings on the proposed amendments, and received nearly 300,000 written comments on the Policy Amendments and more than 500,000 written comments on the Technical Amendments.
According to EPA’s analysis:
The Regulatory Impact Analysis (RIA) for the two rules estimates that, combined, the two actions will yield $750 to $850 million in net benefits over the period from 2021-2030, (7 percent and 3 percent discount rates, respectively), the annualized equivalent of nearly $100 million in net benefits a year.
EPA also estimates that from 2021-2030, the combined rules will result in an increase in 850,000 short tons of Methane emissions and 140,000 tons of VOC emissions.
Environmental groups, liberal states and other interest groups are all but certain to sue to try to block implementation of the new rules, with Earthjustice staff attorney Tim Ballo recently making the following statement:
The Trump administration is once again putting industry interests over people and public health by gutting these common-sense emission standards. The rollback would only further exacerbate a climate crisis that is already near a point of no return. We cannot afford to go back. We’ve successfully sued the Trump administration in their attempt to dismantle methane emission standards in the past, and we’ll sue again to keep these standards in place.
More information about these rules is available at EPA’s website. The rules will take effect 60 days after they are published in the Federal Register.
Trump Administration Issues Final Rule Substantially Modifying NEPA Regulations
By Matthew G. Lawson
On Wednesday, July 15, 2020, the Trump Administration announced the publication of comprehensive updates to federal regulations governing the implementation of the National Environmental Policy Act (NEPA). The updated regulations—issued by the Center on Environmental Quality (“CEQ”)—are provided in the agency’s final rule titled “Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act” (the “Final Rule”), which is expected to be published in a forthcoming Federal Register publication. The Final Rule significantly overhauls the responsibilities of federal agencies under NEPA, and represents the first major overhaul to NEPA’s regulations in over 30 years. During his announcement, President Trump promised that the overhaul would remove “mountains and mountains of bureaucratic red tape in Washington, D.C.” and speed up the approval and construction of major projects such as interstate highways and pipelines.
NEPA requires federal agencies to quantify and consider the environmental impacts of proposed actions “with effects that may be major and which are potentially subject to Federal control and responsibility.” The federal agency must conduct its NEPA review prior to “any irreversible and irretrievable commitments of resources” towards the proposed action. To fulfill its obligations under NEPA, federal agencies much first complete an “Environmental Assessment” (“EA”) that analyzes whether a proposed action will have a significant impact on the environment. If the EA concludes that an action could have significant environmental impacts, the agency is obligated to take the next step under NEPA and prepare a detailed “Environmental Impact Assessment” (“EIS”) that describes and quantifies the anticipated impacts. Federal agencies are required to undertake an EA and potentially an EIS before commencing public infrastructure projects such as roads, bridges and ports, or before issuing permits to certain private actions that require federal approval, such as the construction of pipelines or commencement of mining operations.
The Trump Administration has repeatedly voiced displeasure with the existing NEPA process, which the President has characterized as “increasingly complex and difficult to manage.” Legal challenges initiated under the existing NEPA regulations have also stalled a number of energy projects publicly supported by the administration, including the Keystone XL, the Dakota Access pipelines. The administration's new regulations are expected to reduce the obligations imposed on federal agencies under NEPA through a variety of measures, including reducing the types of environmental impacts that must be considered during a NEPA review; shortening the permitted time period for reviews; and exempting certain types of actions from the review requirements.
While the Final Rule provides numerous modifications to the language of the existing regulations, three changes expected to have substantial impact on the NEPA process include:
- Narrowing of “Effects” that Agencies Must Consider: The Final Rule seeks to narrow the scope of the environmental consequences that must be considered during an agency’s NEPA review by striking from NEPA’s definition of “effects” references to “direct”, “indirect”, and “cumulative” effects. Instead, the new definition provides that federal agencies must only consider environmental “effects” that “are reasonably foreseeable and have a reasonably close casual relational to the proposed action…” According to CEQ, NEPA’s existing definition of “effects” “had been interpreted so expansively as to undermine informed decision making, and led agencies to conduct analyses to include effects that are not reasonably foreseeable or do not have a reasonably close causal relationship to the proposed action or alternatives.” Under the Final Rule’s definition of “effects”, it is unclear whether agencies are ever required to consider a proposed project’s incremental contribution to “global” environment effects, such as Climate Change. Since global effects arguably do not have a “close causal relationship” with any single action, these impacts may now fall outside of NEPA’s purview.
By eliminating the reference to “indirect” emissions and requiring a “close causal relationship” between a project and its environmental effects, the Final Rule also appears to limit federal agencies’ obligation to consider indirect “upstream” and/or “downstream” impacts associated with a project. This issue is of particular significance to the ongoing legal debate regarding the scope of greenhouse gas (“GHG”) emissions that must be considered in NEPA reviews of interstate pipeline projects. Because the volume of GHG emissions caused by the burning of fossil fuels transported by a pipeline often far exceed the emissions directly associated with the pipeline’s construction, litigation can often arise as to whether these subsequent “downstream” emissions must be considered during the pipeline’s NEPA review. Under the Final Rule, it appears that upstream / downstream GHG emissions will often be excluded from NEPA’s requirements unless the emissions have a close relationship with the specific project. Ultimately, the manner in which federal agencies and courts interpret “close causal relationship” in the Final Rule has the potential to significantly reduce the scope of federal agencies’ evaluation of climate change impacts associated with federal projects.
- Limitations on Review Period and Report Length: The Final Rule seeks to expedite the NEPA review process by requiring federal agencies to limit all NEPA reviews to a maximum of two years. In addition, the final EIS issued by an agency may not exceed 150 pages of text or, for proposals of unusual scope of and complexity, 300 pages of text. Exceptions from the review period and/or EIS page limitations may only be granted through specific written approval from a senior agency official. The limitations imposed by the Final Rule appear to represent a significant departure from the existing NEPA process. According to a CEQ Report issued on June 12, 2020, the average final EIS is currently 661 pages in length and takes approximately 4.5 years to complete.
- Directive for Agencies to Expand Categorical Exclusions of NEPA Requirements for Certain Types of Projects: The Final Rule requires federal agencies to develop a list of actions that the agency does not expect to have a significant effect on the environment. Outside of “extraordinary circumstances,” agencies will not be required to conduct an EA for any projects falling within these categorical exclusions. Furthermore, the Final Rule clarifies that a NEPA review is not required where a proposed action would only have “minimal Federal funding or minimal Federal involvement,” such that the agency cannot control the outcome of the project.
The updated regulations are set to take effect 60 days after the publication of the Final Rule in the Federal Register. CEQ has further clarified that federal agencies may apply the updated regulations to any ongoing NEPA reviews, including environmental reviews started before the effective date of the regulations. However, environmental groups have already publicly stated that they intend to challenge the new rule, claiming at least in part that CEQ failed to respond to the more than one million comments that were submitted in response to the proposed new rules.
Lawsuits Challenging EPA’s Temporary Enforcement Discretion Policy for COVID‑19 Pandemic Hit Dead End
By Leah M. Song
As an update to our July 1st blog regarding EPA’s notice that its COVID-19 Temporary Enforcement Policy will end on August 31, 2020, there have been some new developments in the lawsuits filed challenging that policy.
On July 8, 2020, Judge McMahon of the United States District Court for the Southern District of New York ruled that the Natural Resources Defense Counsel and other environmental organizations (“Plaintiffs”) failed to show that they were injured by EPA’s purported “unreasonable delay” in responding to the petition. The Plaintiffs had petitioned EPA to publish an emergency rule requiring an entity to provide written notice if they were suspending monitoring and reporting because of COVID-19.
The court held that the Plaintiffs failed to establish the standing requirements. The Plaintiffs did not establish that they were “legally entitled to the information they seek” and lacked association standing as well. The Plaintiffs did not demonstrate that they “suffered a sufficiently concrete injury nor that that alleged injury is fairly traceable to EPA’s purported delay in responding to the Petition.”
The court said it was “perfectly obvious that, at the time Plaintiffs brought this lawsuit, the EPA had not ‘unreasonably’ delayed its response to the Petition.” Judge McMahon said that “the real litigation – over the legality of the [Enforcement Policy] itself – is presently being briefed in an action brought by nine State Attorneys General. That is where the action will – and should – take place.” Accordingly, the court granted summary judgment in favor of the EPA.
One day later on July 9, the State Attorneys General indicated that they will drop their lawsuit against EPA given the upcoming Enforcement Policy deadline. “EPA does not intend to extend the [Enforcement] Policy beyond August 31 and, should the policy terminate on (or before) August 31, Plaintiffs currently intend to voluntarily dismiss the Complaint without prejudice.” The parties prepared a “contingent, expedited briefing schedule” should EPA not terminate the Enforcement Policy by that date. This announcement this lawsuit will be is unlikely to cause Judge McMahon to revisit the summary judgment ruling since this decision doesn’t change that Plaintiffs lacked standing to bring the claims.
Jenner & Block’s Corporate Environmental Lawyer will continue to update on these matters, as well as other important COVID‑19 related guidance, as they unfold.
Trends in Climate Change Lawsuits: State Common Law Issues
By Leah M. Song
As we have discussed in our previous blog posts, a growing form of climate change litigation in the United States consists of lawsuits filed by states or municipalities against private industry, and more specifically, the fossil-fuel industry. States, cities and other units of local government have filed lawsuits alleging state common law theories, including nuisance, trespass, failure to warn of the known impacts of climate change, and unjust enrichment.
The following cases are the primary cases that are currently ongoing: Rhode Island, Baltimore, Oakland, and San Mateo.
Defendants in these cases have universally tried to remove these cases to federal court where defendants presumably believe that they stand a much greater chance of getting the litigation dismissed. Generally, plaintiffs (including states, units of local government, and non-governmental organizations) asserting climate change claims against corporations prefer to be in state court where they can take advantage of perceived plaintiff-friendly common law or state statutes. On the other hand, defendants inevitably seek to remove such cases to federal court where they have had a higher level of success securing dismissals on the grounds that the issue is preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. See City of N.Y. v. BP P.L.C.. 325 F. Supp. 3d 466 (S.D.N.Y. 2018).
As further discussed below, in most of these cases, the district courts have remanded the cases back to state court and those decision have been appealed to the appellate courts. At the same time, defendants have sought to stay the court’s remand orders while the appeals proceed in federal court. These efforts to stay these remand orders have universally been unsuccessful, with the U.S. Supreme Court refusing to stay these orders, as seen here.
The following provides a brief overview and status update on each of these cases:
- In Mayor and City Council of Baltimore v. BP PLC, Baltimore brought action against various fossil-fuel companies for public nuisance, private nuisance, strict liability failure to warn, strict liability design defect, negligent design defect, negligent failure to warn, trespass, and violations of Maryland’s Consumer Protection Act. As noted above, defendants sought to remove the case to federal court but the district court remanded the case back to the state court.
On March 6, 2020, the Fourth Circuit Court of Appeals affirmed the district court’s order remanding the case back to state court. The district court rejected each of the fossil-fuel companies’ stated grounds for removal, but the Fourth Circuit held that its appellate jurisdiction was limited to a review of the district court’s conclusion that it lacked subject matter jurisdiction under the federal-officer removal statute pursuant to 28 U.S.C. § 1447(d) and 28 U.S.C. § 1442. The Fourth Circuit found none of the three contractual relationships on which the fossil-fuel companies based their claims for federal officer removal were sufficient to justify removal from state court, either because the relationships failed to satisfy the requirement that the fossil-fuel companies were “acting under” the direction of a federal officer or because the contractual relationships were “insufficiently related” to Baltimore’s claims for purposes of the nexus prong.
On March 31, 2020, the fossil-fuel companies filed a petition for a writ of certiorari in the Supreme Court, seeking review of the question of whether the statutory provision prescribing the scope of appellate review of remand orders “permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court where the removing defendant premised removal in part on the federal officer removal statute… or the civil-rights removal statute.” Baltimore’s response was due by April 30, 2020, but has been extended to June 29, 2020 due to the COVID-19 pandemic.
- Rhode Island v. Chevron Corp. et al. was the first climate change damages case to be brought by a In this case, Rhode Island brought action against 21 different fossil-fuel companies for nuisance, strict liability, failure to warn, design defect, trespass, impairment of public trust resources, and violations of the Rhode Island Environmental Rights Act. Rhode Island’s lawsuit asserts that the state’s extensive coastline will be damaged through rising sea levels, increased frequency and severity of flooding and ocean acidification. The fossil-fuel companies had removed to federal court and Rhode Island tried to remand back to state court. On July 22, 2019, the federal court ordered the litigation to be remanded back to Rhode Island state court. While acknowledging that at least two federal courts had reached opposite conclusions, the court held that Rhode Island’s climate change claims were not preempted by the Clean Air Act and did not implicate a substantial federal question such that removal to federal court was appropriate. With respect to the Clean Air Act, the court found that the statute did not act to preempt all state-law causes of action for air pollution, including Rhode Island’s claims against defendants for releases of greenhouse gases. In addition, the court held that Rhode Island’s claims did not implicate a substantial federal question because “[t]he rights, duties, and rules of decision implicated by the complaint are all supplied by state law, without reference to anything federal.”
Rhode Island promptly notified the First Circuit of the Fourth Circuit’s decision in Baltimore, noting that that the Fourth Circuit’s decision “rejects the exact arguments raised … as to the proper scope of … appeal” as well as the fossil-fuel companies’ “tenuous justification for federal officer removal.” In response, Chevron filed a letter seeking to distinguish the Baltimore decision on the grounds that the Fourth Circuit “considered itself bound by [c]ircuit precedent” and had based its holding that federal officer removal was inapplicable on an incorrect characterization of plaintiffs’ claims in that case.
- On May 26, 2020, the Ninth Circuit joined the Fourth Circuit in Baltimore in concluding that these climate change cases alleging only state-common law claims (County of San Mateo v. Chevron Corp. et al. and City of Oakland v. BP p.l.c. et al.) belonged in state court. In County of San Mateo v. Chevron Corp. et al., six California municipalities and counties sued more than 30 fossil-fuel companies in California state court. The plaintiffs brought a variety of claims under state common law including nuisance, negligence, failure to warn, and trespass. In City of Oakland v. BP p.l.c. et al., the cities of Oakland and San Francisco sued five fossil-fuel companies in state court under a theory of nuisance. Defendants sought to remove both cases to federal court. The San Mateo district court remanded the case back to state court while the Oakland district court refused to remand its case, finding instead that plaintiffs’ public nuisance claims were governed by federal common law, but then proceeding to dismiss the lawsuit for failure to state a claim. Both cases were appealed to the Ninth Circuit.
The Ninth Circuit agreed with plaintiffs that two climate change lawsuits had been improperly removed to the federal courts, continuing courts’ recent trend of remanding these types of cases back to state court. These cases were recently analyzed on Jenner & Block’s Corporate Environmental Lawyer here.
Shortly after these rulings, both Rhode Island and Boulder filed letters informing the respective courts of the Ninth Circuit’s San Mateo and Oakland decisions.
Although San Mateo and Oakland did not address the merits of plaintiffs’ common-law claims, these cases will certainly pose challenges for defendants seeking to remove these types of cases to federal court, and will likely affect plaintiffs’ and defendants’ strategies in climate change litigation moving forward.
Jenner & Block’s Corporate Environmental Lawyer will continue to update on climate change litigation cases as they unfold.
The Ninth Circuit Sends Climate Change Cases Back to State Court
By Leah M. Song
On May 26, 2020, the Ninth Circuit agreed with plaintiffs that two climate change lawsuits—County of San Mateo v. Chevron Corp. et al. and City of Oakland v. BP p.l.c. et al.—had been improperly removed to the federal courts, continuing courts’ recent trend of remanding these types of cases back to state court.
A growing form of climate change litigation in the United States consists of lawsuits filed by states or municipalities against private industry, and more specifically, the fossil-fuel industry. States, cities and other units of local government have filed lawsuits alleging state common law theories, including nuisance, trespass, failure to warn of the known impacts of climate change, and unjust enrichment. The outcome of these cases thus far has hinged on whether or not the fossil fuel companies are able to successfully remove the litigation to federal court where they stand a much greater chance of getting the litigation dismissed. Generally, plaintiffs (including states, units of local government, and non-governmental organizations) asserting climate change claims against corporations prefer to be in state court where they can take advantage of perceived plaintiff-friendly common law or state statutes. On the other hand, defendants inevitably seek to remove such cases to federal court where they have had a higher level of success securing dismissals on the grounds that the issue is preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. See City of N.Y. v. BP P.L.C.. 325 F. Supp. 3d 466 (S.D.N.Y. 2018).
In County of San Mateo v. Chevron Corp. et al., six California municipalities and counties sued more than 30 fossil-fuel companies in California state court. The plaintiffs brought a variety of claims under state common law including nuisance, negligence, failure to warn, and trespass. In City of Oakland v. BP p.l.c. et al., the Cities of Oakland and San Francisco sued five fossil-fuel companies in state court under a theory of nuisance. The fossil-fuel companies removed both cases to federal court. The San Mateo district court remanded the case back to state court while the Oakland district court refused to remand the case back to state court, finding that plaintiffs’ public nuisance claims were governed by federal common law, but then proceeding to dismiss the lawsuit. Both cases were appealed to the Ninth Circuit.
On May 26th, the Ninth Circuit joined the Fourth Circuit (Mayor and City Council of Baltimore v. BP P.L.C., et al., No. 19-1644 (4th Cir. Mar. 6, 2020)) in concluding that these climate change cases alleging only state-common law claim belonged in state court. In County of San Mateo v. Chevron Corp. et al., the Ninth Circuit emphasized its limited authority to review an order remanding a case back to state court under 28 U.S.C. § 1447(d). The Ninth Circuit therefore limited its review to determining whether the district court erred in holding that the federal court lacked subject matter jurisdiction under the federal-officer removal statute.
In order to determine whether the district court erred in holding that it did not have subject matter jurisdiction, the Ninth Circuit examined whether the companies were “acting under” a federal officer’s directions. The companies argued that they were “persons acting under” a federal officer based on several agreements with the government. However, the Ninth Circuit concluded that the companies’ activities under these agreements did not give rise to a relationship where they were “acting under” a federal officer. Accordingly, the Ninth Circuit court held that the fossil fuel companies failed to meet their burden for federal-officer removal and therefore affirmed the district court’s remand order.
In City of Oakland v. BP p.l.c. et al., the Ninth Circuit considered whether “the district court erred in determining that it had federal-question jurisdiction under 28 U.S.C. § 1331” and ultimately held that plaintiffs’ state common-law public nuisance claims did not arise under federal common law. The court acknowledged that there are exceptions to the well-pleaded complaint rule for claims that arise under federal law, but concluded that none of those exceptions applied here.
The court reasoned that “[t]he question whether the Energy Companies can be held liable for public nuisance based on production and promotion of the use of fossil fuels and be required to spend billions of dollars on abatement is no doubt an important policy question, but it does not raise a substantial question of federal law for the purpose of determining whether there is jurisdiction under § 1331.” Furthermore, evaluation of the public nuisance claim would require factual determinations which are “not the type of claim for which federal-question lies.” The fossil fuel companies argued that the plaintiffs’ public nuisance claim was completely preempted by the Clean Air Act, but the court was not persuaded.
In response to defendants’ argument that by amending their complaint to assert a federal common law claim, the district court properly had subject matter jurisdiction under 28 U.S.C. § 1331, the Ninth Circuit noted that plaintiffs only amended their complaint in response to the district court’s statements that plaintiffs’ claims were governed by federal common law. Moreover, the Ninth Circuit noted that since a party violates § 1441(a) “if it removes a cases that is not fit for federal adjudication, a district court must remand the case to state court, even if subsequent action conferred subject-matter jurisdiction on the district court.”
Notwithstanding these conclusions, the Ninth Circuit noted that the district court had not addressed alternative bases for removal raised by defendants and therefore remanded the case back to the district court. However, the Ninth Circuit specifically noted that if the district court concludes that there are no valid bases for federal jurisdiction, the case should be remanded back to state court.
Although these rulings did not address the merits of plaintiffs’ common-law claims, these cases will certainly pose challenges for defendants seeking to remove these types of cases to federal court, and will likely affect plaintiffs’ and defendants’ strategies in climate change litigation moving forward. Jenner & Block’s Corporate Environmental Lawyer will continue to update on those matters, as well as other important climate change litigation cases, as they unfold.
U.S. EPA Extends Comment Period on PFAS Safe Drinking Water Act Regulatory Determination to June 10, 2020
By Steven M. Siros
As discussed in more detail in a previous blog, on February 20, 2020, the U.S. Environmental Protection Agency (“U.S. EPA”) announced that it was seeking public comments on its preliminary regulatory determination that seeks to implement regulatory limits for Per- and Polyfluoroalkyl Substances (PFAS) in public drinking water across the United States. The regulatory determination is a key step in the creation of a Maximum Contamination Level (“MCL”) that will act to limit the quantity of PFAS permitted in public drinking water.
In its preliminary regulatory determination, U.S. EPA proposes setting MCL levels for two PFAS substances, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), which EPA has determined meet the statutory criteria to become regulated contaminants under the Safe Drinking Water Act. To meet this criteria, U.S. EPA had to find that: (1) the consumption of PFOS and PFOA may result in adverse health effects; (2) PFOS and PFOA have been identified in public water supplies at frequencies and levels sufficient to cause a public health concern; and (3) that new regulation presents a meaningful opportunity to reduce the health risks posed by PFOS and PFOA.
The Association of Metropolitan Water Agencies and the American Water Works Association (collectively “AMWA”) submitted comments that were supportive of setting an MCL for PFOS and PFOA. In addition to targeting PFOA and PFOS, the AMWA recommended that U. S. EPA also include four other long-chain PFAS compounds in its regulatory determination. AMWA also recommended that U.S. EPA “thoroughly consider state standards and guidelines with significantly lower PFAS levels that [U.S. EPA’s] Health Advisory Level (HAL) of 70 parts per trillion (ppt) for combined concentrations of PFOA and PFOS.”
The AMWA also requested that U.S. EPA extend the comment period an additional 30 days to allow the AMWA to more fully engage with its members and to provide more meaningful and comprehensive comments on the proposal. To that end, U.S. EPA has now agreed to extend the comment period an additional 30 days May 10th to June 10th.
Does Environmental Investigation and Remediation Continue Despite COVID-19 Business Restrictions and Social Distancing?
By: Alexander J. Bandza, Steven M. Siros, and Gabrielle Sigel
As the United States rapidly transitions to working from home (when possible) companies involved in environmental investigations or remediation work must determine whether such field or other work could, should, or must continue in the days, weeks, and months ahead. The world is pivoting to tackle COVID-19, a public health crisis, and many of the “essential services” exempted from stay-at-home/shelter-in-place orders (“Restriction Orders”) include work involving public health and safety, as well as critical infrastructure services. Therefore, any person with ongoing environmental investigation and remediation work (“environmental field work”) has to consider whether that work would be or should be included in the category of “essential services.”
From a policy standpoint, whether environmental field work should be considered “essential” requires an evaluation of the people and the environment potentially put at risk, the likelihood of that risk, and the resources the work uses. Continuation of environmental field work may benefit public health and the environment, but it also is occurring at some cost to public health and safety. For example, environmental projects use personal protective equipment (“PPE”) and laboratory equipment and personnel that may be able to be allocated to medical and other scientific research needs. Furthermore, some environmental field work requires close human contact and, at a minimum, will require travel to work and other activities that the Restriction Orders and federal and CDC guidelines are seeking to avoid. In addition, environmental contractors may not be able to perform work if key personnel are not available to work due to travel restrictions, health impacts, or family obligations. Thus, the consideration of whether environmental field work should continue during the COVID-19 crisis requires weighing complex public health and safety needs and risks.
To help those considering whether and how to continue environmental field work, evaluate the following:
(1) Am I allowed to do the environmental field work under a state or local COVID-19 Restriction Order?
(2) If I cannot continue under a Restriction Order or for other reasons, how do I protect my company’s interests to avoid penalties and other liabilities under the consent decrees, administrative orders, or various other agreements with or regulations imposed by state and federal environmental agencies; and
(3) If I am allowed to or required to continue the work, what regulations pertain to how to do the work safely?
1. AM I ALLOWED TO DO THE WORK UNDER A RESTRICTION ORDER?
As of the time of publication of this alert, there are no federal mandates or executive orders requiring business shutdowns or mandatory quarantines. However, many states, counties, and municipalities are issuing executive orders closing non-essential businesses and limiting gatherings of people.
a. State-Level COVID-19 Executive Orders
Each of these state and local mandates exempt “essential businesses” and the specific definition of an essential business varies from state to state. As a general rule, however, “essential businesses” are those that promote public safety, health, and welfare. Here are examples of several of the first state directives.
California: On March 19, 2020, Governor Newsom issued Executive Order N-33-20 requiring California residents to remain at home unless they are involved in 16 critical infrastructure sectors. These 16 critical infrastructure sectors were designated by the Department of Homeland Security and include the water and wastewater systems sector that is responsible for ensuring the supply of safe drinking water and wastewater treatment and service.
Illinois: On March 20, 2020, Governor Pritzker issued Executive Order 2020-10 requiring Illinois residents to remain in their homes to prevent the spread of COVID-19. The order specifically exempts “essential government functions”, “essential businesses and operations”, and “essential infrastructure activities.” Essential infrastructure activities include operation and maintenance of utilities, including water, sewer, and gas, and solid waste and recycling collection and removal and essential businesses and operations includes construction related activities.
New York: On March 20, 2020, Governor Cuomo issued an Executive Order (referred to as Pause, standing for Policies Assure Uniform Safety for Everyone), requiring that as of 8 p.m. on March 22, all non-essential businesses must ensure that their workforce works remotely. Exempt “Essential businesses” include essential infrastructure (including utilities and construction); essential services (including trash collection, mail, and shipping services; news media; banks and related financial institutions); sanitation and essential operations of residences or other essential businesses; and vendors that provide essential services or products (including services needed to ensure the continuing operation of government agencies and provide for the health, safety, and welfare of the public).
New Jersey: On March 21, 2020, Governor Murphy issued Executive Order 107 requiring that New Jersey residents remain in their homes and requiring that all “non-essential businesses” close. A previously issued executive order (Executive Order No. 104) defined “essential businesses” to include “grocery/food stores, pharmacies, medical supply stores, gas stations, healthcare facilities and ancillary stores within healthcare facilities.” All gatherings within the state are limited to 50 persons or fewer, except for “normal operations at airports, bus and train stations, medical facilities, office environments, factories, assemblages for the purpose of industrial or manufacturing work, construction sites, mass transit, or the purchase of groceries or consumer goods.”
In addition to these states, many other states have either implemented similar orders (including Connecticut, Delaware, and Louisiana) or likely will do so in the coming weeks. While expressly mentioning critical sectors such as health care, police and fire, and grocery stores, the orders do not squarely address whether environmental field work constitutes “essential businesses” subject to these exemptions. However, environmental field work logically could be included under the categories used to describe “essential business,” particularly because many of the environmental statutes requiring such work expressly state that the work is being ordered or conducted to protect human health and the environment.
b. Federal (U.S. EPA) Environmental Agency Guidance
The White House has issued Coronavirus Response Guidelines, “15 Days to Slow the Spread,” including a statement that if you work in one of the 16 “critical infrastructure industries” as defined by the Department of Homeland Security, you have a “special responsibility” to continue to work.
As of this publication, U.S. EPA has not released public guidance on whether ongoing or new site cleanups and/or site investigations would constitute “critical infrastructure industry.” At least to some degree, that determination is likely to be a site-specific, based on the unique circumstances of each site and, as further discussed below, the language of the agency orders or agreements which govern the environmental field work. It is likely that in the coming weeks, U.S. EPA will provide further guidance on assessing whether site cleanup activities constitute “critical infrastructure industry” exempt from the various Restriction Orders. One issue that may need to be resolved in the future relates to potential conflicts in federal and state guidance regarding what constitutes an “essential service.” Such issues could be addressed via federal and state cooperation agreements in the event of possible conflicts between federal and state directives.
c. State Environmental Agency Guidance
At least one state environmental regulatory agency has provided guidance directly on this issue. On March 20, 2020, the California State Resources Water Control Board, which generally has jurisdiction over impacted groundwater in California, published a Guidance Document that states:
Please be aware that timely compliance by the regulated community with all Water Board orders and other requirements (including regulations, permits, contractual obligations, primacy delegations, and funding conditions) is generally considered to be an essential function during the COVID-19 response. As a result, the Water Boards consider compliance with board-established orders and other requirements to be within the essential activities, essential governmental functions, or comparable exceptions to shelter-in-place directives provided by local public health officials.
It is likely that similar guidance will be issued in the coming weeks by other state regulatory agencies.
2. IF I CANNOT CONTINUE THE WORK UNDER A RESTRICTION ORDER OR OTHERWISE, HOW COULD I PROTECT MY COMPANY’S INTERESTS TO AVOID PENALTIES OR OTHER LIABILITIES?
Those responsible for ongoing environmental field work should carefully evaluate the governing consent decrees, administrative orders, or other agreements with state and federal environmental agencies, and private parties, under which they are performing environmental field work. The agreements may well have force majeure and other clauses addressing delays in the work.
For example, under the current federal model remedial design/remedial action (RD/RA) judicial consent decrees with potentially responsible parties (“PRPs”) under sections 106, 107 and 122 of CERCLA, PRPs have both covenanted not to sue the United States and agreed to indemnify the same for “claims on account of construction delays.” There are additional stipulated penalty provisions. Therefore, companies must act pursuant to the force majeure provisions to avoid these claims and stipulated penalties. Force majeure is defined as “any event arising from causes beyond the control of [PRPs], of any entity controlled by [PRPs], or of [PRPs]’ contractors that delays or prevents the performance of any obligation under this [consent decree] despite [PRPs]’ best efforts to fulfill the obligation.”
Relying on these provisions involves:
Notifying “EPA’s Project Coordinator orally or, in his or her absence, EPA’s Alternate Project Coordinator or, in the event both of EPA’s designated representatives are unavailable, the Director of the Waste Management Division” in that specific U.S. EPA Region within a stipulated period of days (the period of days may vary under each consent decree).
Providing in writing to U.S. EPA “an explanation and description of the reasons for the delay; the anticipated duration of the delay; all actions taken or to be taken to prevent or minimize the delay; a schedule for implementation of any measures to be taken to prevent or mitigate the delay or the effect of the delay; [the PRP’s] rationale for attributing such delay to a force majeure; and a statement as to whether, in the opinion of [the PRP], such event may cause or contribute to an endangerment to public health or welfare, or the environment” within a stipulated period of days (the period of days likely varies under each consent decree).
Providing with the above writing “all available documentation supporting their claim that the delay was attributable to a force majeure.”
U.S. EPA is then to provide notice of its decision, which if U.S. EPA rejects the force majeure claim, the responsible parties must provide notice within 15 days of U.S. EPA’s decision to avail themselves of the model consent decree’s dispute resolution provision. The federal Model Administrative Settlement Agreement and Order on Consent for Removal Actions contains similar obligations and provisions.
It is thus plain that responsible parties conducting environmental field work should be prepared to contact U.S. EPA or state regulators orally as soon as practicable to determine their views on the necessity of the work and if there is disagreement about the same, begin to “paper the file” on the necessary force majeure documentation in the time frames provided in the governing consent decrees, administrative orders, or various other agreements with state and federal environmental agencies.
For sites that are in the early investigation stages, regulators may agree to a temporary pause in site investigations. For sites that are currently undergoing remedial measures, the determination on whether work should continue is again likely to be fact dependent. For example, a site with an ongoing groundwater treatment system that is being operated to protect a drinking water source is likely to be deemed an essential activity. For a site where the remedial measures involve excavating impacted soils that are not immediately affecting groundwater sources, it may be the case that the regulators determine that certain activities are not “essential” and can be temporarily paused or scaled back.
Even if the decision is made to proceed with the work, other circumstances may preclude or significantly impair the ability to do the work. For example, it may be difficult to obtain necessary supplies and/or vendors to perform these services. To the extent that wastes are generated in the course of doing this work, can these wastes be managed and disposed of in a timely manner? These are all issues that should be discussed with the regulators or private parties requiring the work.
3. IF I CONTINUE THE WORK, HOW CAN I DO IT SAFELY?
Once a decision is made that environmental field work is “essential” and must proceed to at least some degree, special care must be taken to ensure that the work is performed safely given additional risks imposed by COVID-19. On March 9, 2020, the federal Occupational Safety and Health Administration (“OSHA”) issued its Guidance on Preparing Workplaces for COVID-19 that was the subject of a previous client alert. This OSHA guidance outlines recommended steps that employers should take to protect workers, using OSHA’s “hierarchy of controls” framework for addressing workplace risks (i.e., engineering controls, followed by administrative controls, safe work practices, and PPE. It is also prudent for all entities at the site to consider what steps they will take if they learn that one of the workers has become exposed to the novel coronavirus or contracted COVID-19. On March 20, 2020, the CDC issued updated “Environmental Cleaning and Disinfection Recommendations.”
OSHA has long-standing regulations for work at hazardous waste sites under its Hazardous Waste Operations and Emergency Response (“HAZWOPER”) standard (in general industry 29 CFR 1910.120 and in construction 29 CFR 1926.65), which establishes health and safety requirements for work at sites, as well as responses to emergencies involving releases of hazardous substances. Many environmental investigation and remediation sites have rigorous site-specific health and safety plans, and many are required to have such plans by a consent decree or other regulatory or contractual obligation. Many environmental contractors have such plans as part of their standard operating procedures. However, given COVID-19, special care should be taken to ensure that PPE that would ordinarily be used to prevent exposure to hazardous substances is not contaminated prior to being utilized in the field. Moreover, ensuring feasible physical distancing, requiring diligent hygiene methods, and having appropriate cleaning equipment and chemicals in the field are also critical. All entities with employees at the site should regularly check both the OSHA and CDC website for updated guidance on workplace health and safety best practices. It also is important to ensure that the protocols are being appropriately communicated and followed by all entities (including regulators) at a site; the best protocols and procedures are only as good as their actual implementation by all.
OSHA has reminded the regulated community that if employees contract COVID-19 as a result of performing their work-related duties, the employees who become ill could constitute recordable cases of illness under OSHA’s Injury and Illness Recordkeeping Standard, 29 CFR Part 1904.
Companies and their counsel also should evaluate existing master services agreements that govern the work of their vendors and contractors with a particular eye towards: (i) how indemnification provisions might apply in the event that a vendor’s or contractor’s employee is later determined to be infected with COVID-19 and such a latency period could plausibly extend to such an employee’s work at the company’s site and its employees, and vice versa; and (ii) payment delay provisions should the company or its vendors or contractors become concerned about solvency issues.
We will continue to provide updates on the impacts of COVID-19 on environmental, health and safety issues affecting our clients. Jenner & Block has established a COVID-19 resource center that provides updates on a variety of issues affecting our clients and we would encourage you to visit this resource center for timely updates on COVID-19 related issues.
White House and Congress Use Liability Immunity to Address the Shortage of Respirators in Healthcare Settings
By Gabrielle Sigel, Co-Chair, Environmental and Workplace Health and Safety Law Practice
Due to COVID-19, the nation’s healthcare industry is facing a severe shortage of respiratory protection equipment for healthcare workers. Both Congress and the White House have recently taken steps to try to address that shortage by enacting liability immunity under the Families First Coronavirus Response law, signed late on March 18, 2020. These provisions protect manufacturers, distributors, and others of U.S. Food and Drug Administration (“FDA”)-designated industrial respirators from any claims of liability arising from their use during the response to COVID-19. The intent is that this would increase the supply of NIOSH-approved small-particular filtering respirators from those who manufacture or have on-hand respirators that previously had not been FDA-approved as medical devices.
As explained in OSHA’s Hospital Respiratory Protection Program Toolkit: Resources for Respirator Program Administrators (May 2015), respirators are different from facemasks, including surgical masks. Fluid-resistant facemasks are loose-fitting devices that can protect the healthcare worker from larger droplets of infectious bodily fluids from patients, and vice versa. Facemasks “are not considered respiratory protection— facemasks do NOT provide the wearer with a reliable level of protection from inhaling smaller particles, including those emitted into the room air by a patient who is exhaling or coughing, or generated during certain medical procedures.” Id. at 5. Respirators, on the other hand, protect the hospital worker from both large and small infectious particles in the air (smaller particles are known as “aerosols”). An N95 respirator is a half-mask air-purifying device with NIOSH-approved N95 filters or filtering material. The “95” refers to the NIOSH specification that the respirator filter at least 95% of airborne particles. N95 respirators can be designed for single-use or in a mask that allows re-use after replacement of N95 filter or cartridges, and, in contrast with facemasks, they are designed to form a tight seal on the user’s face. Another type of respirator that protects against inhalation of aerosols is an “air-supplying respirator,” which provides clean air from a source other than the immediate ambient air. Self-contained breathing apparatus, commonly known as “scuba equipment,” is an example of an air-supplying respirator.
Although N95 respirators are generally used in all workplaces where control of inhalation of smaller-sized particles is required to reduce hazards, in order to use such respirators in a hospital, in general, the manufacturer must have its devices approved by the Food and Drug Administration (FDA) as a medical device. Certain N95 respirators can be outfitted with the additional splash protection of a surgical mask, and are called a “surgical respirator,” “medical respirator,” or “surgical N95.” Those devices are deemed a medical device, which must be approved by both the FDA and by NIOSH for their particle-filtering ability Non-surgical N95s are not typically used in a hospital setting and a manufacturer and others may be reluctant to supply them for hospital use, particularly given the potential liability risks from their use in that setting.
Faced with a shortage of surgical N95 respirators, the White House turned to manufacturers and users of industrial N95s as an additional source. On March 2, 2020, the FDA issued an Emergency Use Authorization (EUA), pursuant to section 564 of the Food, Drug, and Cosmetic Act (FDCA), that allows the emergency, COVID-19 use of designated NIOSH-certified N95 respirators in the health care setting. The EUA also stated that certain NIOSH-approved respirators that had passed the manufacturer’s recommended shelf-life also could be used in certain circumstances.
The March 2, 2020 EUA did not address protection of industrial manufacturers from liability for use of respirators in medical settings. On March 11, 2020, the FDA clarified the EUA by stating that the FDA had deemed general use N95 respirators as medical devices within the meaning of 201(h) of the FDCA and eligible for liability protections under the Public Readiness and Emergency Preparedness Act of 2005, 42 U.S.C. § 247d-6d (“the Public Readiness Act”). Under the Public Readiness Act, certain devices, called “countermeasures,” are entitled to broad liability immunity during their use in response to a public health emergency. Specifically, a “covered person” is forever immune from liability for any type of “loss” associated with the use of a designated “countermeasure,” including death, physical, mental, or emotional injury, fear of such injury, including medical monitoring, and damage to property including business interruption. 42 U.S.C. § 247d-6d(a)(1)-(2). A “covered person” includes the United States, manufacturers and distributors of the countermeasure, and all employees of a manufacturer or distributor of a designated countermeasure. 42 U.S.C. § 247d-bd(i)(2). Liability protection is provided regardless of whether the countermeasure is sold, donated or otherwise provided and used for medical services.
On March 14, 2020, the U.S. House of Representatives passed H.R. 6201, the “Families First Coronavirus Response Act,” which in Division F, Section 6005, designated personal respiratory protective devices approved by NIOSH (42 CFR part 84) and designated by the FDA in the March 2, 2020 EUA, as a “covered countermeasure” subject to all liability immunities under the Public Readiness Act.” The U.S. Senate passed the bill, without amendment, on March 18, 2020, and later that day, the bill was signed into law by the President. Industrial respirators will remain a liability-protected countermeasure if they are used to address COVID-19 anytime between January 27, 2020 and October 1, 2024, in response to the public health emergency declared by the Secretary of Health and Human Services Alex M. Azar II on January 31, 2020.
In the meantime, as supplies continue to be short, the CDC has issued guidelines for how medical providers should triage their use of respiratory protective equipment. The guidelines issued as of March 19, 2020 are here.
White House Promises to Use “All Available Tools” to Implement Deep Cuts to EPA Funding in Fiscal Year 2021
By Matthew G. Lawson
On Monday, February 10, 2020, the Trump Administration released its proposed budget for Fiscal Year 2021. The proposal calls for sweeping cuts to a number of federal agencies and departments, including deep cuts to the United States Environmental Protection Agency (“USEPA”). If enacted, the proposed budget would grant $6.7 billion in funding to USEPA, a $2.4 billion or 26-percent reduction from the agency’s $9.1 billion budget in 2020. In the budget proposal’s preamble, the Administration promises to “call on the Government to reduce wasteful, unnecessary spending, and to fix mismanagement and redundancy across agencies.”
With respect to USEPA’s budget allocation, the proposal promises to “eliminate almost 50 wasteful programs that are outside of EPA’s core mission or duplicative of other efforts, saving taxpayers over $600 million.” Proposed major cuts include the reduction of nearly 50% of the agency’s research budget, including all funding for grants to independent universities and research institutes conducting air, water, and other environmental and health research. Another target for deep cuts is USEPA’s safe drinking water revolving funds. The revolving funds are used to help fund water infrastructure projects undertaken by state or municipal public water providers. Under the proposed budget, the available funds for such projects would be cut from approximately $2.77 billion down to $2 billion.
While the proposal primarily focuses on proposing cuts to USEPA’s fiscal budget, it does contain a few line item requests for additional funding. In particular, the proposal asks for an additional $6 million to carry out USEPA’s Per- and Polyfluoroalkyl Substances (PFAS) Action Plan. The additional funding is sought to continue research into the risk posed by PFAS compounds, address current contamination issues, and effectively communicate findings to the public. In addition, the budget requests $16 million into new research to help prevent and respond to the rising growth of harmful algal blooms.
The budget proposal is not the first time the Trump Administration has sought to implement deep cuts into USEPA’s budget. In fact, the Trump Administration has now proposed nearly identical cuts to the agency’s budget in each of the last three fiscal years. As previously discussed by the Corporate Environmental Lawyer, the Trump Administration first proposed a $2.7 billion budget reduction for USEPA in fiscal year 2018. However, the proposal was rebuffed by congress and the final spending bill ultimately signed by Trump held the agency’s budget at $8.1 billion, even with its 2017 level. The following year, the Trump Administration again proposed cutting the agency’s budget by more than $2 billion, but ultimately agreed to a spending deal that increased the agency’s budget to $8.8 billion. Finally, during fiscal year 2020, the Trump Administration proposed approximately $2.7 billion in cuts to USEPA’s budget. As before, Congress rejected the proposal and ultimately approved a nearly record high budget for USEPA of $9.1 Billion. Congress’ continued rejection of the spending cuts proposed by the Trump Administration is acknowledged in the Administration’s most recent 2021 budget proposal, which derides Congress for continuing “to reject any efforts to restrain spending” and “greatly contribut[ing] to the continued ballooning of Federal debt and deficits, putting the Nation’s fiscal future at risk.” The proposal promises that the Trump Administration will use “all available tools and levers” to ensure that the spending reductions outlined in the budget are finally implemented.
California Lowers Response Levels for PFAS Compounds
By Steven M. Siros
On February 6, 2020, California’s Water Resources Control Board (WRCB) announced that it would be dropping the response levels (RLs) for perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) from 70 parts per trillion (ppt) to 10 ppt for PFOA and 40 ppt for PFOS. This announcement comes on the heels of the WRCB’s August 2019 decision to lower the notification levels (NLs) for these compounds to 5.1 ppt for PFOA and 6.5 ppt for PFOS. An exceedance of the NL requires that the drinking water provider notify their governing boards and the WRCB of the exceedance—this notification would need to occur within 30 days of receipt of the validated laboratory results. In the event of an exceedance of the RL, the water provider must either (1) take the source out of service immediately; (2) utilize treatment or blending; or (3) provide public notification of the exceedance within 30 days of receipt of the validated laboratory results.
At the same time, the WRCB has asked California’s Office of Environmental Health Hazard Assessment (OEHHA) to proceed with the development of public health goals for both PFOA and PFOS which is a step in the process of establishing maximum contaminants levels for these contaminants. We will continue to monitor and provide updates with respect to these ongoing regulatory activities.
Clothing Company Agrees to Pay $69.5 Million to Settle PFAS Claims
By Steven M. Siros
In a consent decree filed in the United States District Court for the Western District of Michigan, Wolverine World Wide, Inc. (“Wolverine”) has agreed to pay up to $69.5 million to resolve claims that it was responsible for PFAS contamination found in drinking water in the Michigan townships of Plainfield and Algoma. The consent decree alleges that Wolverine’s historical operations utilized PFAS to waterproof clothing and that these operations resulted in PFAS releases that impacted local drinking water supplies in these Michigan townships. Although Wolverine disputes these allegations, in the consent decree, Wolverine agreed that it would (1) remediate the PFAS impacts at its historical operations and (2) provide alternative drinking water supplies for approximately 1,000 properties within the zone of PFAS impacted groundwater.
U.S. EPA Adds 160 PFAS Substances to TRI Reporting List
On January 16, 2020, U.S. EPA added 160 per- and polyfluoroalkyl substances (PFAS) to the Toxics Release Inventory (TRI). The addition of these 160 PFAS compounds to the TRI inventory means that as of January 1, 2020, companies will need to track releases of these compounds, and releases exceeding the threshold, which was set at 100 pounds, must be reported to U.S. EPA. Interestingly, there currently is an open Advance Notice of Proposed Rulemaking (ANPR) that seeks public comment on whether and how to include PFAS on the TRI inventory, but U.S. EPA noted that the 2020 National Defense Authorization Act (NDAA) required it to add these 160 substances to the inventory. Although the NDAA only specified 14 PFAS that needed to be added to the inventory, it did specify that PFAS that were the subject of a significant new use rule on or before December 20, 2019 under the Toxic Substances Control Act also needed to be added to the TRI inventory.
U.S. EPA’s actions have already triggered a number of questions. For example, how is the ANPR (which remains open through February 3, 2020) affected by U.S. EPA’s decision to add these chemicals to the inventory? How does one accurately measure PFAS air emissions since the methodology for measuring these emissions is currently being developed? Hopefully, further clarification on these issues will be forthcoming in the near future.