Today, June 1, 2020 marks the opening of the window to submit data for the four-year reporting period under the Chemical Data Reporting Rule (CDR Rule) of the Toxic Substances Control Act (TSCA). The CDR Rule requires manufacturers (including importers) of substances listed on the TSCA Chemical Inventory to submit data to EPA every four years. Companies subject to the CDR Rule should be aware of several developments that affect reporting requirements and procedures this reporting period.
The question of how to regulate temperature in water bodies is one that states in the Northwest have struggled with for years. The U.S. Environmental Protection Agency (EPA) addressed that question on May 18, 2020, when it released a draft Total Maximum Daily Load (TMDL) to achieve water quality standards for temperature in certain reaches of the Columbia and Lower Snake Rivers in Oregon and Washington. This new TMDL comes a few months after a decision from the U.S. Court of Appeals for the Ninth Circuit, Columbia Riverkeeper v. Wheeler, requiring the agency to take the lead after Oregon and Washington failed to submit their own TMDL. Comments on the draft TMDL are due by the end of July 21, 2020.
On May 26, 2020, the Ninth Circuit issued two related decisions in City of Oakland and County of San Mateo brought by California cities and counties against major oil and gas companies. Exclusively citing state law relating to, among other things, nuisance, negligence, and trespass, the California municipalities allege that the companies’ fossil fuel activities have substantially contributed to climate change and, in doing so, impermissibly caused public harm. The municipalities accordingly demand the companies reimburse their costs reacting to and preparing for the effects of climate change. At issue before the Ninth Circuit was whether these claims triggered the jurisdiction of federal courts. Answering this question in the negative, the court determined that the cases must proceed at the state level.
The new hazardous waste pharmaceutical management standards established by EPA’s Management Standards for Hazardous Waste Pharmaceuticals and Amendment to the P075 Listing for Nicotine (“Rule”) are already effective in some states. Other states must adopt the rule by July 1, 2021 or, if a statutory amendment is required prior to the state’s adoption, by July 1, 2022. Based on this, all “healthcare facilities” and “reverse distributors,” as defined by the Rule, will ultimately be required to comply with the Rule (as adopted in each state). Continue Reading “Unauthorized Waste” Reporting Under EPA’s Hazardous Pharmaceutical Waste Rule
Amid the ongoing public health pandemic, EPA has issued two fact sheets suggesting it may conclude that a federal drinking water standard for perchlorate is not warranted. In a June 2019 blog post we reported that EPA asked the public whether it should set a Maximum Contaminant Level (MCL) for perchlorate. Setting an MCL for this substance could affect both public water systems and other regulated entities. But EPA’s preliminary move last week appears to suggest that EPA is preparing to conclude that an MCL may not be warranted for perchlorate.
On May 14, 2020, EPA issued two factsheets indicating that levels of perchlorate in drinking water are declining. The first fact sheet, “Reductions of Perchlorate in Drinking Water,” analyzed the updated data used to develop the June 2019 notice, compared to data from 2001-2005 which served as a basis for EPA’s 2011 determination to regulate perchlorate. In its fact sheet, EPA largely attributes perchlorate reductions to the promulgation of chemical-specific drinking water regulations in California and Massachusetts and groundwater remediation efforts in Nevada. Other activities that have contributed to reducing perchlorate levels include cleanup of large point source contamination and remediation at Superfund sites throughout the country. The factsheet also provides updates regarding the fifteen water systems identified as having elevated perchlorate levels in 2001-2005.
EPA also released a second factsheet titled “Steps Water Systems Can Take to Address Perchlorate in Drinking Water”. This document provides step-by-step advice to water systems that may be concerned with the levels of perchlorate in their drinking water. The factsheet provides guidance to water systems on how to test water, interpret the results, compare them to state drinking water standards and guidelines, and communicate them to customers, as well as how to reduce perchlorate levels by treatment and non-treatment methods and by changes in storage and handling of common disinfectants solutions.
EPA is expected to issue a final decision regarding regulation of perchlorate in June 2020.
On May 13, nine state attorneys general filed a complaint against the U.S. Environmental Protection Agency (EPA) challenging EPA’s COVID-19 enforcement discretion policy, which we discussed in previous articles here and here. The plaintiff states are New York, California, Illinois, Maryland, Michigan, Minnesota, Oregon, Vermont and Virginia.
Basis of the Complaint
The complaint levies four primary allegations against EPA and its policy: (1) the discretion that EPA allows in the policy exceeds EPA’s legal authority; (2) EPA is abdicating its environmental enforcement responsibility under the law; (3) EPA implemented the policy without first providing opportunity for notice and comment; and (4) the policy is arbitrary and capricious. For relief, the AGs first request a declaratory judgment that the “policy was adopted without observance of procedure required by law; is in excess of EPA’s statutory jurisdiction, authority, or limitations; is not in accordance with law; and is arbitrary and capricious.” Additionally, the AGs request (1) that the policy be vacated; (2) that EPA be enjoined from applying the policy; (3) lawsuit/attorneys’ fee reimbursement; and (4) any other relief deemed “just and proper.”
To support these allegations and prayers for relief, the AGs outline their grievances along relatively predictable lines. The complaint alleges — numerous times — that the policy does not provide enough transparency to states and citizens alike. EPA’s decision to not include specific reporting requirements appears to be a major sticking point. Instead, the policy requires that entities must report to EPA when it is “reasonably practicable” to do so, but should, in any case, maintain internal documentation of noncompliance, to be made available to EPA on request.
The other major theme of the complaint deals with the general level of allegedly permissive language and compliance relaxation that the policy contains, leading, as the argument goes, to potential adverse public health impacts via increased pollution, as well as increased strain on state enforcement agencies. The AGs point to several specific allowances under the policy, such as the increased storage time allowance for generators of Resource Conservation and Recovery Act (RCRA) hazardous waste and the allowance for animal feeding operations (AFOs) to avoid designation as a concentrated AFO (CAFO). The complaint also takes issue with the policy’s treatment of public water system monitoring requirements, though note that the policy explicitly states that “EPA expects operators of such systems to continue normal operations and maintenance as well as required sampling to ensure the safety of our drinking water supplies.”
For examples of what they would prefer EPA’s policy to look like, the AGs point to the enforcement discretion policies of Michigan (see its policy here; see our article on the policy here) and California (see a statement on its policy here), stating “that [those policies] set forth an expectation of compliance with all requirements but [also allow] for case-by-case consideration of regulatory flexibility where compliance is not feasible.” In states like Michigan, each entity receiving enforcement discretion is tracked on a publicly available spreadsheet posted on the state agency’s website.
What This Lawsuit Means for Enforcement Discretion
As we indicated in a previous article, lawsuits such as this are a fairly predictable response to EPA’s policy. But while the lawsuits are not surprising, they should not be ignored. All companies and their counsel, regardless of the state in which company operations are located, should closely monitor this and other policy opposition actions (such as this April 16 lawsuit filed by an environmental group) as they continue to develop. All companies should also continue to remain cautious and thoughtful when relying on EPA’s policy for any sort of environmental enforcement relief. Thorough documentation tying noncompliance to COVID-19 will be critical for companies seeking to avail themselves of EPA’s policy or state policies. All events of noncompliance or other deviations from normal compliance conditions should be internally documented with an eye toward preserving all applicable legal defenses in the event of state or third-party environmental group lawsuits. Additionally, timely communication between applicable environmental agencies and company environmental, health and safety (EHS) staff will remain vital to maintaining consistency with the policy.
However, companies that have operations located within the nine states that filed suit should proceed with additional caution. Given that these states have now taken legal action against EPA’s policy and its use, further reliance on the policy in these states may carry increased or additional risks. For example, these states may begin to show a heightened interest in making inquiries designed for public disclosure regarding policy-protected noncompliance, or they may otherwise direct state agencies to increase scrutiny of all regulated operations with a federal component, such as those authorized under Clean Air Act (CAA) Title V permits.
Finally, all parties should continue to understand that the benefits of the policy, such as they are, are limited only to EPA enforcement obligations. Nonfederal agencies remain separate and apart from the policy and are not bound by its terms. Continue to consider a close review of all applicable state, tribal and local agency enforcement discretion policies, where these policies exist.
The attorneys at Pepper Hamilton and Troutman Sanders are actively working to assist companies in evaluating these complex issues and working with environmental regulators during this challenging time. For more information on these issues, please contact the authors.
Yesterday, the U.S. District Court for Montana amended its April 15, 2020, order vacating Nationwide Permit (NWP) 12, which authorizes minimal impacts from “utility line activities” to jurisdictional waters. As we previously reported, despite the case centering on the Keystone XL Pipeline, the court’s April 15 order vacated NWP 12 nationwide for all activities (including broadband, electric, water and sewer) until the U.S. Army Corps of Engineers (Corps) consults with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (Services) pursuant to the Endangered Species Act (ESA). In yesterday’s order, the court amended the vacatur’s applicability by limiting it to the construction of new oil and gas pipelines. Under the amended order, the Corps may continue to authorize the use of NWP 12 for construction of new utility lines for broadband, electric, water, and sewer, as well as “maintenance, inspection, and repair activities” on existing utility lines, including existing pipelines.
On May 5, 2020, the Illinois Attorney General filed a complaint against a developer and its contractors responsible for demolishing the smokestack of a former coal-fired power plant in Chicago. The suit provides a good reminder that careful planning for the control of fugitive dust emissions is critical during decommissioning activities—and that state legal offices and regulators will keep their eyes on potential environmental issues at coal-fired plants until the last brick comes down.
According to the complaint, the primary defendant, Hilco Redevelopment, purchased the coal plant in 2017, five years after the plant was shut down. Hilco planned to redevelop the as a warehouse, hired contractors to demolish the smokestack, and obtained a demolition permit from the city. Its contractors developed a demolition plan, and Hilco set a date of April 11, 2020 for bringing down the stack. It circulated a community notice of the demolition two days prior to demolition, with assurances that Hilco would have dust control and mitigation measures in place.
The Illinois Attorney General now has alleged that Hilco and its contractors did not, in fact, take measures needed to prevent the demolition from spreading a cloud of dust across the local community which already was a state-designated area of concern for environmental justice. Although the city had separately cited the defendants for violating demolition ordinances, the Attorney General asserted its own claim for violating the State’s broad prohibition on “air pollution,” defined as emissions that can injure health, damage property, or unreasonably interfere with property use. Ill. Adm. Code tit. 35, §§ 201.102, 201.141.
The basis of the Attorney General’s claim is the impact of particulate matter/dust on human health. Of note to utilities and other companies planning demolition projects, the complaint also cites “historic exposure” to stack emissions as an aggravating aspect of the dust, as well as the fear of hazardous constituents being present in the dust cloud. Also, in a sign of the times, the complaint contends that the impact of the demolition was exacerbated by the need for the public to shelter in place during the current pandemic.
The complaint seeks an order requiring Hilco and its contractors to undertake all necessary corrective action to remediate any contamination caused by its. It also seeks a civil penalty of up to $50,000, plus up to $10,000 for each day until corrective action occurs.
This action illustrates the significant compliance scrutiny that stack/plant demolitions may face, especially in urban areas. Practically speaking, it is impossible to avoid generating some amount of fugitive dust during large-scale demolition activities, but companies should ensure that: (1) a detailed and effective dust suppression plan is in place prior to any planned demolition; (2) regulators and the public are given advance notice of significant demolition activities before they occur; and (3) compliance with the dust control plan is carefully documented during demolition activities and can be provided to regulators if requested.
On April 20, the Supreme Court of the United States reversed the Montana Supreme Court’s decision in Atlantic Richfield Co. v. Christian, limiting restoration damages claims beyond Environmental Protection Agency-approved cleanups at Superfund sites, while affirming the right of private parties to seek other kinds of damages under state law. The majority decision, penned by Chief Justice John Roberts, turns on a plain-text interpretation of the definition of “potentially responsible parties” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Over a dissent by Justice Neil Gorsuch joined by Justice Clarence Thomas, the Court found that the affected landowners are potentially responsible parties and, therefore, restricted from challenging EPA-approved remediation plans.
The Anaconda Smelter near Butte, Montana processed copper ore depositing arsenic, lead, copper, cadmium, and zinc throughout the region for nearly a century until operations ceased in 1980. The smelter and 300 square miles of surrounding land were designated as a Superfund site under the CERCLA in 1984. Atlantic Richfield Co. (ARCO), which purchased the smelter near the end of its life, took on responsibility for the site’s cleanup under the CERCLA.
The remediation plan adopted by the EPA requires excavation and removal of 12 to 18 inches of topsoil from residential yards with high arsenic levels, and treatment of affected private wells used for drinking water. In 2008, 98 owners of property within the site filed claims based on trespass, nuisance, and strict liability, claiming compensation for five categories of damages, including compensatory damages for loss of use, diminution of value, and “annoyance and discomfort.” They also contended that the EPA-approved plan fell short of the full restoration provided for under Montana common law. The plaintiff property owners calculated restoration damages of $50 to $58 million based on the cost of a more intensive remediation plan, including the removal of two feet of topsoil from affected properties and the installation of an 8,000-foot underground permeable barrier to reduce arsenic in the underlying aquifer. Their suit proposed that any restoration damages ultimately awarded by a jury would be held in trust, to be used exclusively for the restoration of affected properties.
Following an initial remand, ARCO’s motions for summary judgment were denied by the trial court. The key question taken up by the Montana Supreme Court and ultimately the U.S. Supreme Court on appeal was whether state law-based restoration damages claims, which have the potential to far exceed the affected properties’ diminution in value, are barred by the CERCLA.
The Montana high court and the U.S. Supreme Court agreed that state courts could hear Superfund-related common law claims, rejecting ARCO’s contention that Congress implicitly granted federal courts exclusive jurisdiction by barring state courts from reviewing “any challenges to removal or remedial action” under the Act, and explicitly granting exclusive jurisdiction to federal courts over “all controversies arising under [the CERCLA].”
The Montana Supreme Court focused on whether the plaintiffs were “challenging” the EPA’s remediation and restoration efforts. The state court decision pointed out that the property owners’ claims were damages claims, first and foremost, and that their restoration plan had been developed as a measure of damages, not as a proposal for action.
[The] restoration damages Property Owners seek are to be placed in a trust account and used to further restore affected properties beyond levels required by the EPA. … To the extent that EPA’s work is ongoing, the Property Owners are not seeking to interfere with that work, nor are they seeking to stop, delay, or change the work EPA is doing.
The Montana court also rejected ARCO’s characterization of the property owners as “potentially responsible parties” under the Act, pointing out that the EPA had never treated them as such for purposes of liability and implying that it would not be fair to do so “solely for the purpose of . . . barr[ing] their claims for restoration.” The Montana court charged ARCO with attempting to “overcomplicate” the matter by “recast[ing] what is, at its essence, a common law claim for damages into a challenge to EPA’s cleanup.”
ARCO’s framing was more compelling to the U.S. Supreme Court, which reversed the Montana holding on the basis that the property owners did, in fact, qualify as “potentially responsible parties.” The majority based this position on a “straightforward reading” of the definition of “potentially responsible party,” which includes owners of “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.” Writing for the Court, the Chief Justice emphasized the potential for interference with remediation and the need to protect cleanups from “collateral attack.” He also rejected the suggestion that the property owners be allowed to undertake remediation independently, even after all of the EPA’s remediation work was concluded:
Section 122(e)(6) is one of several tools in the Act that ensure the careful development of a single EPA-led cleanup effort rather than tens of thousands of competing individual ones. [U]nder the landowners’ interpretation, property owners would be free to dig up arsenic-infected soil and build trenches to redirect lead-contaminated groundwater without even notifying EPA.
In the “spirit of cooperative federalism,” the CERCLA provides opportunities for public consultation and participation early on, according to the majority. However, “once a plan is selected, the time for debate ends and the time for action begins.”
Certain language from the decision may, however, open court doors to other claims, including those for remediation costs that have been approved by the EPA:
[ARCO] remains potentially liable under state law for compensatory damages, including loss of use and enjoyment of property, diminution of value, incidental and consequential damages, and annoyance and discomfort. The damages issue before the Court is whether [ARCO] is also liable for the landowners’ own remediation beyond that required under the Act. Even then, the answer is yes—so long as the landowners first obtain EPA approval for the remedial work they seek to carry out.
Further, claims may multiply, particularly at Superfund sites where the discovery of new contaminants or improved understanding of the impacts of known contaminants provide a basis for approving new remediation.
The prospect that the EPA could wield complete control over private property remediation provoked objections in a dissenting opinion from Justices Gorsuch and Thomas. The dissenters proposed an alternative approach to interpreting the meaning of “potentially responsible party” that turned on the “ordinary public meaning” of the term at the time that the CERCLA was adopted, relying on dictionaries rather than statutory definitions:
To be “potentially responsible” for something meant [in 1980], as it does today, that a person could possibly be held accountable for it; the outcome is capable of happening. American Heritage Dictionary 1025 (1981); Webster’s New Collegiate Dictionary 893 (1980). And there is simply no way the landowners here are potentially, possibly, or capable of being held liable by the federal government for anything…. On any reasonable account, the landowners are potentially responsible to the government for exactly nothing. (Emphasis in original).
The dissent also expressed alarm about the potential loss of individual rights under state law, and about the practical implications of prohibiting further action without express government approval: “States and private landowners alike . . . could be barred even from undertaking remedial efforts on their own lands at their own expense, required instead to host toxic wastes involuntarily and indefinitely.” The result of the majority’s interpretation of “potentially responsible party,” according to Justice Gorsuch, was to “transform [the CERCLA] from a law that supplements state environmental restoration into one that prohibits them. Along the way, it strips away ancient common law rights from innocent landowners and forces them to suffer toxic waste in their backyards, playgrounds, and farms.”
Atlantic Richfield v. Christian likely will put a damper on claims for restoration damages. However, while restoration damages can no longer be considered by juries for Superfund sites unless they are based on a plan already approved by the EPA, juries still may award substantial sums for other kinds of damages, including tort claims filed in state court, before, during, or after Superfund site remediation. The U.S. Supreme Court’s ruling expressly affirms plaintiffs’ right to claim loss of use and enjoyment of property, diminution of value, incidental and consequential damages, and annoyance and discomfort. Similarly, defendants will need to take heed and be vigilant that juries are not presented with evidence that implicitly encourages awards for the cost of additional remediation beyond EPA requirements.
Atlantic Richfield v. Christian also highlights a new and potentially growing divide within the Court regarding the appropriate scope of federal power, with possible implications for broader aspects of environmental law, including the relative future significance of federal law and state common law for environmental policy and regulation.
As we previously reported, the Federal District Court for Montana vacated the U.S. Army Corps of Engineers (Corps) Nationwide Permit (NWP) 12 on April 15, 2020, finding that the Corps had failed to consult with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service prior to issuing NWP 12. Despite the case centering on the Keystone XL Pipeline, the court’s decision vacated NWP 12 nationwide and prevents the Corps from authorizing a broad range of utility projects that are unrelated to the Keystone XL Pipeline.