PFAS MDL Settlements: Red Herrings For Downstream Companies

Leading up to the aqueous film-forming foam (AFFF) MDL litigation bellwether trial in June 2023, questions circulated regularly about the end game for the water utilities that had filed lawsuits alleging PFAS contamination to drinking water. With several hundred utilities with pending lawsuits seeking the costs for technology needed to filter PFAS from drinking water, monitoring wells, testing equipment, disposal costs, etc., and potentially thousands of other water utilities with similar potential lawsuits, the damages seemed astronomical. So, too, did the amount of time it would take to litigate each case to get the water utilities monetary relief. These two competing forces, plus the pressure of an actual trial date looming, led Dupont and 3M to announce PFAS MDL settlements in June 2023. At $1.185 billion by Dupont and between $10.3 billion and $12.5 billion by 3M, with the intention of both settlement funds to resolve all pending and potential water utility claims in the United States, it seemed to many that a resolution had been achieved that would address PFAS in drinking water systems without burdening utility customers or the utilities themselves.

The issue, though, is that over 9,000 water utilities were estimated to be in need of treatment technology to meet the EPA’s newly proposed drinking water standards. The American Water Works Association (AMWA) reminded everyone that their own estimates of the costs of compliance to the EPA’s level would cost utilities over $3.2 billion annually. Even buying into the old joke that lawyers are horrible at math, it does not take long for one to realize the significant gap in the proposed settlement amounts and AMWA’s estimates. Water utilities accepting money under the Dupont and 3M settlement funds are not all going to receive 100% of the necessary funding for remediation. How then will this deficit be resolved?

Water utilities will be reluctant to pass on all of the costs to customers, although pricing increases could provide a stopgap measure for water utilities on top of the MDL settlement funds. State or even federal funding may be available under grant, loan or other programs that can also assist. However, when the dust settles, it is likely that water utilities are going to look to a particular group of parties to pursue damages from – companies that discharged PFAS into waterways that fed into the water utility facilities. Lawsuits already abound nationally filed by private citizens against such companies for property damage, bodily injury and medical monitoring. Why then would water utilities finding themselves in need of significant money to properly treat drinking water not take similar legal action? Couple this with pressure water utilities are starting to receive in the form of finding themselves sued in class action lawsuits by private citizens, and the legal notion of contribution begins to ring very true for water utilities looking to minimize their own damages in such lawsuits and find sources of funding for remediation technology.

Companies that have historically discharged effluent into waterways that feed drinking water supplies must therefore keep all of the above in mind and not be lulled into a false sense of complacency that the Dupont and 3M settlements in the MDL are going to mean the end of PFAS drinking water litigation. I predict quite the opposite.

It is of the utmost importance that businesses along the whole commerce chain that have or believe that they might have used PFAS in certain processes take steps now to understand their PFAS risk. Public health and environmental groups urge legislators to regulate PFAS at an ever-increasing pace. Similarly, state level EPA enforcement action is increasing at a several-fold rate every year. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers. The only way to manage future risk is to fully understand what that risk picture looks like, and companies would be well-advised to invest in proper diligence for the PFAS risk question.

FDA Lists Regulations Under Development and Updates Priority Guidance Topics for Foods Program

  • The U.S. Food and Drug Administration’s (FDA’s) Foods Program has posted a new website listing regulations it plans to publish by October 2024 and long-term regulations it is prioritizing for publication at a later date. Additionally, FDA has updated the list of guidance topics it is considering and expects to publish by the end of 2024.
  • Regulations are officially announced in the Unified Agenda of Regulatory and Deregulatory Actions published each spring and fall. Some of the regulations FDA has listed on its website include use of the “healthy” nutrient content claim, the use of ultrafiltered milk in cheese and cheese related products, and front-of-package nutrition labeling, among others.
  • The following five topics have been added to the list of guidance documents the FDA expects to publish by the end of December 2024:
    • Notifying FDA of a Permanent Discontinuance in the Manufacture or an Interruption of the Manufacture of an Infant Formula; Draft Guidance for Industry;
    • Action Levels for Lead in Food Intended for Babies and Young Children: Guidance for Industry;
    • The Food Traceability Rule: Questions and Answers; Draft Guidance for Industry;
    • Hazard Analysis and Risk-Based Preventive Controls for Human Food; Chapter 12: Preventive Controls for Chemical Hazards: Draft Guidance for Industry; and
    • Voluntary Sodium Reduction Goals: Target Mean and Upper Bound Concentrations for Sodium in Commercially Processed, Packaged, and Prepared Foods (Edition 2): Draft Guidance for Industry
  • Public comments on the list of guidance topics can be submitted to www.regulations.gov using Docket ID FDA-2022-D-2088.

Multistate Coalition Supports EPA’s Proposed Revisions to the Safer Choice Standard

As reported in our December 5, 2023, memorandum, the U.S. Environmental Protection Agency (EPA) proposed updates to the Safer Choice Standard on November 14, 2023, that include a name change to the Safer Choice and Design for the Environment (DfE) Standard (Standard), an update to the packaging criteria, the addition of a Safer Choice certification for cleaning service providers, a provision allowing for preterm partnership termination under exceptional circumstances, and the addition of several product and functional use class requirements. 88 Fed. Reg. 78017. On January 16, 2024, California Attorney General Rob Bonta announced that, alongside a coalition of 12 attorneys general, he submitted a comment letter that:

  • Supports EPA’s proposed revisions to its Safer Choice Standard;
  • Recommends that EPA not allow products with plastic primary packaging to use the Safer Choice label or DfE logo;
  • Recommends that if EPA does allow products with plastic primary packaging to use the label and logo, EPA should prohibit the use of chemical recycling in meeting the proposed standard’s plastic packaging recycled content requirements; and
  • Calls on EPA to exclude any products or packaging that contain any per- and polyfluoroalkyl substances (PFAS), “whether intentionally introduced or not.”

Can Artificial Intelligence Assist with Cybersecurity Management?

AI has great capability to both harm and to protect in a cybersecurity context. As with the development of any new technology, the benefits provided through correct and successful use of AI are inevitably coupled with the need to safeguard information and to prevent misuse.

Using AI for good – key themes from the European Union Agency for Cybersecurity (ENISA) guidance

ENISA published a set of reports earlier last year focused on AI and the mitigation of cybersecurity risks. Here we consider the main themes raised and provide our thoughts on how AI can be used advantageously*.

Using AI to bolster cybersecurity

In Womble Bond Dickinson’s 2023 global data privacy law survey, half of respondents told us they were already using AI for everyday business activities ranging from data analytics to customer service assistance and product recommendations and more. However, alongside day-to-day tasks, AI’s ‘ability to detect and respond to cyber threats and the need to secure AI-based application’ makes it a powerful tool to defend against cyber-attacks when utilized correctly. In one report, ENISA recommended a multi-layered framework which guides readers on the operational processes to be followed by coupling existing knowledge with best practices to identify missing elements. The step-by-step approach for good practice looks to ensure the trustworthiness of cybersecurity systems.

Utilizing machine-learning algorithms, AI is able to detect both known and unknown threats in real time, continuously learning and scanning for potential threats. Cybersecurity software which does not utilize AI can only detect known malicious codes, making it insufficient against more sophisticated threats. By analyzing the behavior of malware, AI can pin-point specific anomalies that standard cybersecurity programs may overlook. Deep-learning based program NeuFuzz is considered a highly favorable platform for vulnerability searches in comparison to standard machine learning AI, demonstrating the rapidly evolving nature of AI itself and the products offered.

A key recommendation is that AI systems should be used as an additional element to existing ICT, security systems and practices. Businesses must be aware of the continuous responsibility to have effective risk management in place with AI assisting alongside for further mitigation. The reports do not set new standards or legislative perimeters but instead emphasize the need for targeted guidelines, best practices and foundations which help cybersecurity and in turn, the trustworthiness of AI as a tool.

Amongst other factors, cybersecurity management should consider accountability, accuracy, privacy, resiliency, safety and transparency. It is not enough to rely on traditional cybersecurity software especially where AI can be readily implemented for prevention, detection and mitigation of threats such as spam, intrusion and malware detection. Traditional models do exist, but as ENISA highlights they are usually designed to target or’address specific types of attack’ which, ‘makes it increasingly difficult for users to determine which are most appropriate for them to adopt/implement.’ The report highlights that businesses need to have a pre-existing foundation of cybersecurity processes which AI can work alongside to reveal additional vulnerabilities. A collaborative network of traditional methods and new AI based recommendations allow businesses to be best prepared against the ever-developing nature of malware and technology based threats.

In the US in October 2023, the Biden administration issued an executive order with significant data security implications. Amongst other things, the executive order requires that developers of the most powerful AI systems share safety test results with the US government, that the government will prepare guidance for content authentication and watermarking to clearly label AI-generated content and that the administration will establish an advanced cybersecurity program to develop AI tools and fix vulnerabilities in critical AI models. This order is the latest in a series of AI regulations designed to make models developed in the US more trustworthy and secure.

Implementing security by design

A security by design approach centers efforts around security protocols from the basic building blocks of IT infrastructure. Privacy-enhancing technologies, including AI, assist security by design structures and effectively allow businesses to integrate necessary safeguards for the protection of data and processing activity, but should not be considered as a ‘silver bullet’ to meet all requirements under data protection compliance.

This will be most effective for start-ups and businesses in the initial stages of developing or implementing their cybersecurity procedures, as conceiving a project built around security by design will take less effort than adding security to an existing one. However, we are seeing rapid growth in the number of businesses using AI. More than one in five of our survey respondents (22%), for instance, started to use AI in the past year alone.

However, existing structures should not be overlooked and the addition of AI into current cybersecurity system should improve functionality, processing and performance. This is evidenced by AI’s capability to analyze huge amounts of data at speed to provide a clear, granular assessment of key performance metrics. This high-level, high-speed analysis allows businesses to offer tailored products and improved accessibility, resulting in a smoother retail experience for consumers.

Risks

Despite the benefits, AI is by no-means a perfect solution. Machine-learning AI will act on what it has been told under its programming, leaving the potential for its results to reflect an unconscious bias in its interpretation of data. It is also important that businesses comply with regulations (where applicable) such as the EU GDPR, Data Protection Act 2018, the anticipated Artificial Intelligence Act and general consumer duty principles.

Cost benefits

Alongside reducing the cost of reputational damage from cybersecurity incidents, it is estimated that UK businesses who use some form of AI in their cybersecurity management reduced costs related to data breaches by £1.6m on average. Using AI or automated responses within cybersecurity systems was also found to have shortened the average ‘breach lifecycle’ by 108 days, saving time, cost and significant business resource. Further development of penetration testing tools which specifically focus on AI is required to explore vulnerabilities and assess behaviors, which is particularly important where personal data is involved as a company’s integrity and confidentiality is at risk.

Moving forward

AI can be used to our advantage but it should not been seen to entirely replace existing or traditional models to manage cybersecurity. While AI is an excellent long-term assistant to save users time and money, it cannot be relied upon alone to make decisions directly. In this transitional period from more traditional systems, it is important to have a secure IT foundation. As WBD suggests in our 2023 report, having established governance frameworks and controls for the use of AI tools is critical for data protection compliance and an effective cybersecurity framework.

Despite suggestions that AI’s reputation is degrading, it is a powerful and evolving tool which could not only improve your business’ approach to cybersecurity and privacy but with an analysis of data, could help to consider behaviors and predict trends. The use of AI should be exercised with caution, but if done correctly could have immeasurable benefits.

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* While a portion of ENISA’s commentary is focused around the medical and energy sectors, the principles are relevant to all sectors.

Exploring the Future of Information Governance: Key Predictions for 2024

Information governance has evolved rapidly, with technology driving the pace of change. Looking ahead to 2024, we anticipate technology playing an even larger role in data management and protection. In this blog post, we’ll delve into the key predictions for information governance in 2024 and how they’ll impact businesses of all sizes.

  1. Embracing AI and Automation: Artificial intelligence and automation are revolutionizing industries, bringing about significant changes in information governance practices. Over the next few years, it is anticipated that an increasing number of companies will harness the power of AI and automation to drive efficient data analysis, classification, and management. This transformative approach will not only enhance risk identification and compliance but also streamline workflows and alleviate administrative burdens, leading to improved overall operational efficiency and effectiveness. As organizations adapt and embrace these technological advancements, they will be better equipped to navigate the evolving landscape of data governance and stay ahead in an increasingly competitive business environment.
  2. Prioritizing Data Privacy and Security: In recent years, data breaches and cyber-attacks have significantly increased concerns regarding the usage and protection of personal data. As we look ahead to 2024, the importance of data privacy and security will be paramount. This heightened emphasis is driven by regulatory measures such as the California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR). These regulations necessitate that businesses take proactive measures to protect sensitive data and provide transparency in their data practices. By doing so, businesses can instill trust in their customers and ensure the responsible handling of personal information.
  3. Fostering Collaboration Across Departments: In today’s rapidly evolving digital landscape, information governance has become a collective responsibility. Looking ahead to 2024, we can anticipate a significant shift towards closer collaboration between the legal, compliance, risk management, and IT departments. This collaborative effort aims to ensure comprehensive data management and robust protection practices across the entire organization. By adopting a holistic approach and providing cross-functional training, companies can empower their workforce to navigate the complexities of information governance with confidence, enabling them to make informed decisions and mitigate potential risks effectively. Embracing this collaborative mindset will be crucial for organizations to adapt and thrive in an increasingly data-driven world.
  4. Exploring Blockchain Technology: Blockchain technology, with its decentralized and immutable nature, has the tremendous potential to revolutionize information governance across industries. By 2024, as businesses continue to recognize the benefits, we can expect a significant increase in the adoption of blockchain for secure and transparent transaction ledgers. This transformative technology not only enhances data integrity but also mitigates the risks of tampering, ensuring trust and accountability in the digital age. With its ability to provide a robust and reliable framework for data management, blockchain is poised to reshape the way we handle and secure information, paving the way for a more efficient and trustworthy future.
  5. Prioritizing Data Ethics: As data-driven decision-making becomes increasingly crucial in the business landscape, the importance of ethical data usage cannot be overstated. In the year 2024, businesses will place even greater emphasis on data ethics, recognizing the need to establish clear guidelines and protocols to navigate potential ethical dilemmas that may arise. To ensure responsible and ethical data practices, organizations will invest in enhancing data literacy among their workforce, prioritizing education and training initiatives. Additionally, there will be a growing focus on transparency in data collection and usage, with businesses striving to build trust and maintain the privacy of individuals while harnessing the power of data for informed decision-making.

The future of information governance will be shaped by technology, regulations, and ethical considerations. Businesses that adapt to these changes will thrive in a data-driven world. By investing in AI and automation, prioritizing data privacy and security, fostering collaboration, exploring blockchain technology, and upholding data ethics, companies can prepare for the challenges and opportunities of 2024 and beyond.

Jim Merrifield, Robinson+Cole’s Director of Information Governance & Business Intake, contributed to this report.

EPA Proposes Updates Intended to Strengthen the Safer Choice Standard

The U.S. Environmental Protection Agency (EPA) announced proposed updates to the Safer Choice Standard on November 13, 2023. According to the November 14, 2023, notice, the proposed changes include a name change to the Safer Choice and Design for the Environment (DfE) Standard (Standard), an update to the packaging criteria, the addition of a Safer Choice certification for cleaning service providers, a provision allowing for preterm partnership termination under exceptional circumstances, and the addition of several product and functional use class requirements. 88 Fed. Reg. 78017. EPA notes that Safer Choice helps consumers, businesses, and purchasers find products that perform and contain ingredients that are safer for human health and the environment and states that DfE is a similar program currently used by EPA to help consumers and commercial buyers identify antimicrobial products that meet the health and safety standards of the typical pesticide registration process required by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as well as other EPA DfE criteria. EPA will hold a webinar on December 19, 2023, on its proposed plans for updating the Standard. After EPA’s presentation, there will be time for a question and answer period. EPA asks that comments be submitted in writing after the webinar. Comments on the proposed changes are due January 16, 2024. EPA has posted on its website the proposed changes to the Standard, as well as a “preamble” explaining the proposed changes.

According to the preamble, when EPA adopts the revisions, it expects to make them effective “upon the finalization and public notification.” EPA states that candidate partners would need to comply with the updated Standard prior to becoming program partners and that existing program partners would be expected to comply with the revisions within the year following their next partnership renewal.

EPA notes that many of its proposed revisions are in the nature of technical amendments. EPA states that in some instances, it also deleted text from the Standard to avoid redundancy with program criteria expressed elsewhere. EPA proposes to introduce the following topics to highlight their importance and specifically requests comments on them:

Entering or Exiting a Product Class (Section 3.4)

EPA has added detail to the Standard on its process for entering and exiting product classes (i.e., a category of products that have similar functions). EPA states that it may solicit public input before entering or exiting a product class. According to EPA, for entering a new product class, it will consider various factors (e.g., product type, functionalities, and improvements to health and the environment) and determine whether entering the new product class will advance the goals of the Safer Choice and DfE programs.

EPA notes that on “rare occasions,” newly available information may indicate that a class of products poses unanticipated serious adverse health or environmental effects. In such circumstances, EPA may find it necessary to end any partnerships and discontinue certification of products in the class, at least until EPA can understand the cause of the adverse effects and, if possible, develop criteria to address them. EPA proposes to add provisions to address these situations in Section 3.4.2.1 Exceptional circumstances affecting health or the environment. The preamble states that “[i]n general, if EPA decides to exit a product class, EPA will allow a period of time for partners to cease use of the product label or logo.”

On-Site Audit (Section 3.6.2)

EPA currently requires audits on a yearly basis throughout the partnership, including one on-site audit in the first or second year of the partnership cycle. To ensure that partners are formulating certified products in compliance with Safer Choice criteria, EPA proposes, in Section 3.6.2 On-site audit, that the first audit for a new partner must be an on-site audit.

Information to Help Reduce Carbon-Based Energy Consumption (Section 4.2.3.1)

EPA proposes to update the Standard to encourage and recognize product manufacturers’ efforts to incorporate energy-saving technologies and approaches. This optional provision in Section 4.2.3.1 Information to help reduce carbon-based energy consumption lists actions manufacturers may implement. Partners may be recognized for demonstrating outstanding leadership and innovation in sustainable energy use.

Primary Packaging (Section 4.2.5)

To respond to increased demand for more sustainable practices, EPA proposes to update its packaging criteria to ensure that certified products also use safer, more sustainable packaging. According to the preamble, the revised requirements are informed by common themes across existing third-party packaging sustainability schemes. EPA notes that the proposed specific recycled content levels “do not necessarily come from existing schemes but, based on research, are understood to be leadership but achievable levels.”

EPA proposes to add requirements to Section 4.2.5 Primary packaging on recyclability and recycled content, label compatibility, and primary packaging ingredients. Specifically, EPA proposes to require that primary packaging either be recyclable and contain a minimum level of post-consumer recycled content or be designed to be reused. Additionally, EPA proposes to require that product labels associated with primary packaging not affect recyclability and that proper recycling method(s) be clearly indicated on the packaging.

EPA also proposes to add per- and polyfluoroalkyl substances (PFAS) and all bisphenol-based chemicals to its list of ingredients that may not be intentionally introduced into primary packaging material. EPA states that it will explicitly list the four heavy metals (cadmium, lead, mercury, and hexavalent chromium) currently covered by the Standard as ingredients that may not be intentionally introduced into primary packaging material.

EPA seeks stakeholder comment on all aspects of the primary packaging requirements, including, but not limited to:

  • Are the proposed minimum post-consumer recycled content levels feasible for primary packaging made of plastic, glass, metal, fiber (e.g., paper or cardboard), or other sustainable materials? If not, what levels would be feasible? How should EPA consider multi-material packaging?
  • Is it reasonable for EPA to require that the entire product primary packaging be recyclable? If not, what is an appropriate minimum percent of recyclable material?
  • Is it reasonable for EPA to require both a minimum recycled content and package recyclability? What are the challenges to achieving both simultaneously?
  • In developing its final criteria, should EPA consider concerns for contaminants that may be intentionally added and/or unintentionally introduced into recycled materials? At what point should testing occur?

Yellow Triangle Content Limit (Section 4.2.8)

To enhance transparency, EPA is updating the Standard to reflect the ongoing practice of allowing the use of yellow-triangle designated chemicals from the Safer Chemical Ingredients List (SCIL) when they do not cumulatively exceed ten percent in the product as sold.

Ingredient Combinations Causing Adverse Effects (Section 4.5)

According to EPA, certain ingredients, while independently meeting Safer Choice ingredient criteria, may cause adverse effects when combined. EPA states that it does not allow ingredient combinations known to cause negative synergistic effects and is updating the Standard to reflect this ongoing practice in Section 4.5 Ingredient Combinations Causing Adverse Effects.

Products in Solid or Particulate-Generating Form (Section 4.6)

EPA proposes to add Section 4.6 Products in Solid or Particulate-Generating Form to require certain information from manufacturers. EPA proposes to require that, upon request, manufacturers of products in particulate-generating or solid form provide information to determine that the product does not contain or generate a substantial portion of particles that are respirable (ten microns or less).

Special Product Classes (Section 4.7)

EPA states that over the years, to extend the reach of the program into product categories where manufacturers sought to lead the market with safer ingredients, it has developed policy criteria and guidance as a supplement to the broader Standard. According to EPA, these policies have been distributed widely and posted on the Safer Choice website. EPA now proposes to add links to the Safer Choice website, where criteria can be found for the following product classes: Section 4.7.1 Ice-melt productsSection 4.7.2 Inorganic- and mineral-based productsSection 4.7.3 Microorganism-based products, and Section 4.7.6 Marine lubricants. EPA proposes to provide a brief description of each product class in the Standard and to refer readers to the Safer Choice website for the full criteria.

Products Intended for Use on Pets (Section 4.7.5)

EPA is adding a product class for non-pesticidal and non-drug pet care products in Section 4.7.5 Products intended for use on pets. EPA states that it will evaluate chemicals used in products intended for use on pets for human and pet health, in addition to environmental toxicity and fate. EPA will not allow ingredients in pet care products that are severely irritating or corrosive to skin or eyes unless whole product testing demonstrates low concern for irritation. EPA will also not allow Globally Harmonized System of Classification and Labeling of Chemicals (GHS) listed sensitizers in certified pet care products (unless the manufacturer provides whole product testing demonstrating low concern for sensitization or a rationale based on functional necessity that also addresses sensitization) and will require that ingredients meet direct release criteria, with the exception of fragrance materials.

EPA requests comment on the feasibility of the requirements for direct release, irritation, and sensitization for pet care products.

Direct Release Products (Section 4.8.1)

According to EPA, a number of stakeholders have approached Safer Choice to request the addition of a label that would distinguish products that meet Safer Choice direct release criteria. The preamble includes the following questions for comment:

  • Would it be helpful to have a version of the Safer Choice label with text that distinguishes products that meet direct release criteria (similar to the Fragrance-Free Safer Choice label)?
  • Would text such as “approved for outdoor use” better communicate the meaning of direct release to consumers and purchasers?
  • Are there alternative phrases to “approved for outdoor use” that EPA should consider?

General Requirements (Section 5.2): Use of New Approach Methodologies (NAM)

EPA states that it continues to advance the use of NAMs to replace laboratory animal studies, and the program will continue to adopt NAMs as they are developed. The proposed revisions to the Standard include changes in the following sections to formalize the ongoing Safer Choice use of NAMs: Section 5.2 General Requirements and Section 4.2.2 pH.

Component-Specific Requirements (Sections 5.3, 5.11, and 5.17)

EPA states that it proposes several revisions and additions to Section 5 Component-Specific Requirements.

Surfactants (Section 5.3)

Under Section 5.3 Surfactants, EPA is proposing to require aquatic toxicity data for at least one trophic level for surfactants (or a close analog). EPA notes its ongoing practice that where data for human health are available, EPA will evaluate chemicals based on the thresholds in the Master Criteria.

Disposable Wipes (Section 5.11)

EPA notes that the Standard currently limits the composition of wipe materials to those that are readily compostable and cites cotton and bamboo as examples. To reinforce current industry practice, EPA proposes to require that all wipe-based products indicate they are not flushable to carry the Safer Choice label or DfE logo. EPA proposes to modify Section 5.11 Disposable Wipes to indicate that wipes made from both natural fibers and synthetic fibers from renewable sources are acceptable, provided they have similar biodegradability profiles (as demonstrated by one of the following or similar methods: EN13432, ASTM 6400, ASTM 5338, or ISO 14855). Wipes-based products must also include a “do not flush” logo and language on product labels to qualify for certification. Since fibers are often treated with processing chemicals to create the nonwoven substrates, EPA states that it is also adding clarifying language on additive components (such as binders or coatings) in nonwoven substrates and how they must also meet program criteria.

EPA requests comment on the functionality and consumer acceptance of wipes that are composed of natural fibers and synthetic fibers from renewable sources, and the preamble includes the following question:

  • Should EPA only allow natural fibers in disposable wipes or also allow compostable synthetic fibers from renewable sources?

Odor Elimination Chemicals (Section 5.17)

EPA proposes to add Section 5.17 Odor Elimination Chemicals to formalize the evaluation criteria already used for odor elimination chemicals, which function to reduce or eliminate odorous chemicals. According to EPA, it would continue to evaluate odor elimination chemicals based on general requirements in Section 5.2 and based on requirements provided on the Safer Choice website.

SCIL (Section 5.18)

EPA states that it believes that additional language further describing the relationship between the SCIL, the Standard, and Safer Choice- and DfE-certified products would provide additional transparency. Specifically, EPA proposes to describe the evaluation process for single Chemical Abstracts Service Registry Numbers® (CAS RN®) that cover broad ranges of chemical structures.

Use of the Safer Choice Label by Raw Material Suppliers (Section 6.3)

EPA states that it is aware that raw material suppliers may wish to communicate that they supply ingredients that meet Safer Choice criteria and proposes to add language to the Standard that explains how the Safer Choice label should be used by material suppliers. EPA proposes to add Section 6.3 Use of the Safer Choice Label by Raw Material Suppliers to document the ongoing practice under which raw material suppliers may use the Safer Choice label to indicate that certain raw materials meet Safer Choice criteria or that a specific supplier can formulate to meet Safer Choice criteria. EPA notes that it currently allows this practice for raw material suppliers with chemical ingredients listed on CleanGredients (https://cleangredients.org/). EPA proposes to continue to work with interested raw material suppliers on a case-by-case basis.

Safer Choice Cleaning Service Certification (Section 7)

EPA requests comment on whether it should establish a Safer Choice Cleaning Service Certification for cleaning service providers that use Safer Choice-certified products for cleaning and DfE-certified products for disinfecting. EPA states that residential and commercial cleaning service providers, as well as facility owners, managers, and government entities that provide in-house cleaning would be eligible for this certification. Entities that could be certified must be organizations and businesses that use cleaners, detergents, disinfectants, and related products as part of their primary operations. According to EPA, program certification would require organizations and businesses to use exclusively Safer Choice-certified products for cleaning and DfE-certified products for disinfecting, in product categories with Safer Choice- and DfE-certified products, to the maximum extent practicable. EPA may grant exceptions at its discretion on a case-by-case basis. Certified cleaning service providers would be permitted to display the Safer Choice Service Certification logo (outlined in Section 7.6), and their name and contact information would be listed on the Safer Choice website.

EPA states that candidates for Safer Choice Cleaning Service Certification must use a Safer Choice-qualified third-party profiler to prepare and submit applications, document exceptions, and conduct annual virtual audits. There is a cost associated with obtaining these services. The proposal for the Safer Choice Cleaning Service Certification is in Section 7 of the Standard, with a template partnership agreement in Annex D. EPA requests comment on the following questions:

  • Other than the exceptions outlined in Section 7.3.1.1, should other exceptions be included? Are these exceptions overly broad? Is granting the exceptions under this certification appropriate?
  • Do you have a preference between the Safer Choice Service Certification logos in Section 7.6? Comments on the logo elements (e.g., tagline, color, and shape) would be especially valuable. Which do you think would best communicate the meaning of the certification?
  • Should any of the locations for use of the Safer Choice Service Certification logo listed in Section 7.6.2 be removed or should additional locations be added?

Private Label, Licensee, and Toll Manufacture Products (Sections A.13 and B.13): Private Label Company Dilution

To document the ongoing practice under which EPA explicitly allows for dilution of a concentrated form of a product by a private label company at its facility, EPA proposes to add language to the Safer Choice Partnership Agreement template in Section A.13 Private Label, Licensee, and Toll Manufacture Products and in the equivalent section (B.13) in the DfE Partnership Agreement template to allow dilution of a certified concentrate conducted by a private label company. EPA states that it allows such “Ready To Use” private label products to be certified on a case-by-case basis. The partner must communicate that the concentrate is being diluted and the corresponding dilution rates to EPA.

Commentary

We commend EPA for seeking to expand the utility of its Safer Choice/DfE recognition. Such recognition provides consumers and end users a robust system from which to select “greener” products. Many have argued that the Safer Choice/DfE program should be managed by a non-governmental organization (like other green standards), but our view is that Safer Choice provides benefits to the marketplace because it carries EPA’s imprimatur and it provides EPA greater visibility in an area EPA is committed to promote.

The packaging criteria are important but present many challenges to Safer Choice partners. Most packaging is considered an article under TSCA, and there is limited supply chain visibility into the content of packaging. Participants in Safer Choice and their suppliers need to provide EPA with a practicable standard. Supply chain agreements can provide insight into what is intentionally added and may include limits on impurities, but will have to avoid “free of” standards because suppliers may be reluctant to provide certification that any particular contaminant is not present at all at any level. The spate of PFAS consumer product litigation has made that reality abundantly clear. This is especially true for recycled content, such as recycled plastic. If the Safer Choice standard is such that it can only be met by virgin plastic resin, the standard that is meant to drive circularity will instead effectively force products out of Safer Choice when participants cannot meet an impossibly difficult packaging standard.

EPA’s proposed consideration of synergistic effects could benefit from clarity on how EPA will consider and evaluate synergistic effects. Will EPA require testing for synergistic effects, or will EPA consider such effects only in cases in which EPA has had some indication of synergistic effects? In those cases, will the standard prohibit one or both of the ingredients, or only prohibit the combination?

EPA’s proposed category for non-pesticidal and non-drug pet care products is a sensible expansion for Safer Choice. It may be surprising to readers that while a shampoo intended for humans is regulated as a cosmetic in the United States by the U.S. Food and Drug Administration (FDA) under the Federal Food, Drug, and Cosmetic Act (FFDCA), an identical formulation for a shampoo intended for pets is regulated by EPA under TSCA. EPA’s criteria for household care products should provide a foundation upon which EPA can develop criteria for pet care.

A key expansion that EPA proposes is recognition for service providers. The idea is that a cleaning service provider that uses Safer Choice/DfE products to the extent practicable can receive recognition and advertise that recognition to potential customers. This expansion of Safer Choice has the potential to increase substantially the quantity of Safer Choice-recognized products by encouraging service providers to maximize their use of such products.

There are great opportunities for the expansion of Safer Choice. It is important for suppliers and formulators to engage with EPA to ensure that the criteria are robust and practicable.

FTC to Send Nearly $100 Million in Refunds in Vonage Settlement

On October 30, 2023, the Federal Trade Commission announced that it is sending nearly $100 million in refunds to consumers who were harmed as a result of internet phone service provider Vonage’s alleged use of dark patterns and other obstacles that made it difficult for users to cancel their service.

In its November 2022 complaint against Vonage, the FTC alleged that Vonage made its cancellation process more difficult to navigate than its enrollment process. In particular, Vonage allegedly restricted users to a single method of cancellation, charged unexpected early termination fees, continued to charge users after they canceled, and issued only partial refunds for overbilled amounts. Vonage and the FTC subsequently reached a settlement where Vonage agreed to pay $100 million in refunds to consumers harmed by the company’s actions, implement a simple and transparent cancellation process, and stop charging consumers without their consent.

The FTC is now in the process of sending payments to 389,106 consumers. Eligible consumers will receive refunds by check or PayPal.

 

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For more news on Federal Trade Commission Refunds, visit the NLR Antitrust & Trade Regulation section.

The FCC Approves an NOI to Dive Deeper into AI and its Effects on Robocalls and Robotexts

AI is on the tip of everyone’s tongue it seems these days. The Dame brought you a recap of President Biden’s orders addressing AI at the beginning of the month. This morning at the FCC’s open meeting they were presented with a request for a Notice of Inquiry (NOI) to gather additional information about the benefits and harms of artificial intelligence and its use alongside “robocall and robotext”. The following five areas of interest are as follows:

  • First, the NOI seeks, on whether and if so how the commission should define AI technologies for purposes of the inquiry this includes particular uses of AI technologies that are relevant to the commission’s statutory response abilities under the TCPA, which protects consumers from nonemergency calls and texts using an autodialer or containing an artificial or prerecorded voice.
  • Second, the NOI seeks comment on how technologies may impact consumers who receive robocalls and robotexts including any potential benefits and risks that the emerging technologies may create. Specifically, the NOI seeks information on how these technologies may alter the functioning of the existing regulatory framework so that the commission may formulate policies that benefit consumers by ensuring they continue to receive privacy protections under the TCPA.
  • Third, the NOI seeks comment on whether it is necessary or possible to determine at this point whether future types of AI technologies may fall within the TCPA’s existing prohibitions on autodial calls or texts and artificial or prerecorded voice messages.
  • Fourth, NOI seeks comment on whether the commission should consider ways to verify the authenticity and legitimately generate AI voice or text content from trusted sources such as through the use of watermarks, certificates, labels, signatures, or other forms of labels when callers rely on AI technology to generate content. This may include, for example, emulating a human voice on a robocall or creating content in a text message.
  • Lastly, seeks comment on what next steps the commission should consider to further the inquiry.

While all the commissioners voted to approve the NOI they did share a few insightful comments. Commissioner Carr stated “ If AI can combat illegal robocalls, I’m all for it” but he also expressed that he does “…worry that the path we are heading down is going to be overly prescriptive” and suggests “…Let’s put some common-sense guardrails in place, but let’s not be so prescriptive and so heavy-handed on the front end that we end up benefiting large incumbents in the space because they can deal with the regulatory frameworks and stifling the smaller innovation to come.”

Commissioner Starks shared “I, for one, believe this intersectionality is clinical because the future of AI remains uncertain, one thing is clear — it has the potential to impact if not transform every aspect of American life, and because of that potential, each part of our government bears responsibility to better understand the risks, opportunities within its mandate, while being mindful of the limits of its expertise, experience, and authority. In this era of rapid technological change, we must collaborate, lean into our expertise across agencies to best serve our citizens and consumers.” Commissioner Starks seemed to be particularly focused on AI’s ability to facilitate bad actors in schemes like voice cloning and how the FCC can implement safeguards against this type of behavior.

“AI technologies can bring new challenges and opportunities. responsible and ethical implementation of AI technologies is crucial to strike a balance, ensuring that the benefits of AI are harnessed to protect consumers from harm rather than amplifying the risks in increasing the digital landscape” Commissioner Gomez shared.

Finally, the topic around the AI NOI wrapped up with Chairwoman Rosenworcel commenting “… I think we make a mistake if we only focus on the potential for harm. We needed to equally focus on how artificial intelligence can radically improve the tools we have today to block unwanted robocalls and robotexts. We are talking about technology that can see patterns in our network traffic, unlike anything we have today. They can lead to the development of analytic tools that are exponentially better at finding fraud before it reaches us at home. Used at scale, we cannot only stop this junk, we can use it to increase trust in our networks. We are asking how artificial intelligence is being used right now to recognize patterns in network traffic and how it can be used in the future. We know the risks this technology involves but we also want to harness the benefits.”

How to Succeed in Environmental Marketing Claims

Environmental marketing claims often present something of a Catch-22—companies that are doing actual good for the environment deserve to reap the benefits of their efforts, and consumers deserve to know, while at the same time, heightened scrutiny from the Federal Trade Commission (FTC), the National Advertising Division (NAD), state regulators and the plaintiffs’ bar have made such claims increasingly risky.

In 2012, the FTC issued the Green Guides for the use of environmental marketing claims to protect consumers and to help advertisers avoid deceptive environmental marketing. Compliance with the Green Guides may provide a safe harbor from FTC enforcement, and from liability under state laws, such as California’s Environmental Marketing Claims Act, that incorporate the Green Guides. The FTC has started a process to revise the Green Guides, including a request for comments about the meaning of “sustainable.” In the meantime, any business considering touting the environmental attributes of its products should consider the following essential takeaways from the Green Guides in their current form:

    • Substantiation: Substantiation is key! Advertisers should have a reasonable basis for their environmental claims. Substantiation is the support for a claim, which helps ensure that the claim is truthful and not misleading or deceptive. Among other things, substantiation requires documentation sufficient to verify environmental claims.
    • General benefit claims: Advertisers should avoid making unqualified claims of general benefit because substantiation is required for each reasonable interpretation of the claim. The more narrowly tailored the claim, the easier it is to substantiate.
    • Comparative claims: Advertisers should be careful and specific when making comparative claims. For example, a claim that states “20% more recycled content” begs the question: “compared to what?” A prior version of the same product? A competing product? Without further detail, the advertiser would be responsible for the reasonable interpretation that the product has 20% more recycled content than other brands, as well as the interpretation that the product has 20% more recycled content than the advertiser’s older products.
    • General greenwashing terms: Advertisers should be very cautious when using general environmental benefit terms such as “eco-friendly,” “sustainable,” “green,” and “planet-friendly.” Those kinds of claims feature prominently in many complaints alleging greenwashing, and they should only be used where the advertiser knows and explains what the term means, and can substantiate every reasonable interpretation of the claim.

Putting it into Practice: Given the scrutiny that environmental claims tend to attract, advertisers should exercise care when making environmental benefit claims about their products and services. They should narrowly tailor their claims to the specific environmental attributes they want to promote, and perhaps most important, they should ensure they have adequate backup to substantiate their claims. While the FTC Green Guides are due for a refresh (which we will surely report on), for the time being, they will continue to serve as important guidance for advertisers seeking to inform consumers without exposing their business to FTC scrutiny or class action litigation.

Canadian PFAS Drinking Water Standards Proposed

We have documented for several years now the U.S. EPA’s efforts to propose enforceable drinking water standards with respect to PFAS, and in September 2022, the World Health Organization (WHO) issues its own draft “PFOS and PFOS In Drinking-Water” Background Document.  Now, on the heels of these developments, Canadian PFAS drinking water standards were introduced, which add another regulatory layer to the globally evolving PFAS regulatory scheme. Notably, Canada takes a different approach than both the United States and the WHO in addressing PFAS drinking water issues, but the proposal will nonetheless have impacts on U.S. PFAS litigation if passed.

Canadian PFAS Drinking Water Standards

Canada’s draft proposal sets a limit of 30 ppt for any detected PFAS combined in a given drinking water source. This is in contrast to the WHO, which only addressed PFOA and PFOS in its draft recommendations for drinking water standards, and the EPA, which by all indications will only propose enforceable drinking water standards for a small subset of the over 12,000 PFAS that exist. The Canadian standards, though, do propose requiring that EPA Testing Methods 533 or 537.1 be used for detection, which only tests for 29 PFAS types. Nevertheless, the large group approach to PFAS drinking water standards is unique for the moment to Canada, although the WHO did include in its proposal a similar limited subset of PFAS for countries to consider when setting or proposing drinking water standards.

Comments to the Canadian draft document are being accepted through April 12, 2023.

EPA’s Drinking Water Actions

We previously detailed how, on June 15, 2022, the EPA issued Health Advisories (HAs) for five specific PFAS, PFOA (interim), PFOS (interim), PFBS (final) and GenX (final). While not enforceable levels for PFAS in drinking water, the EPA’s PFAS Health Advisories are nevertheless incredibly significant for a variety of reasons, including influence on future federal and state drinking water limits, as well as potential impacts on future PFAS litigation.

The levels set by the EPA’s PFAS Health Advisories were as follows:

PFOA .004 ppt
PFOS .02 ppt
GenX 10 ppt
PFBS 2,000 ppt

Since the HAs were published, the EPA has faced several lawsuits challenging the HAs. The lawsuits generally allege that the HAs should be struck down and are not valid, as they were created “arbitrarily and capriciously.”  In support, the moving parties say that the HAs were created in an improper manner because (1) they incorporated toxicity assumptions that deviate from the EPA’s own standard methods; and (2) EPA incorporated grossly incorrect and overstated exposure assumptions―in essence, EPA used the wrong chemical when making its exposure assumptions, thereby resulting in a significantly less tolerant health advisory for [PFAS] than is warranted by the data. In addition, the parties argue that the EPA failed to go through the necessary public comment period before issuing its final GenX HA, and that in creating the GenX HA, the EPA exceeded its authority under the Safe Drinking Water Act.

Canadian PFAS Impacts On EPA Efforts and Litigation

When the WHO PFAS report was released, we wrote that the report will have an impact on existing and future litigation that challenges EPA regulatory actions focused on PFAS. Our reasoning for the prediction was that the standards proposed by the WHO were significantly higher than the EPA’s Health Advisories (which may foreshadow where the EPA’s enforceable drinking water limits will be set) even though the WHO had available to it much of the same scientific literature as the EPA. The Canadian PFAS drinking water proposal of 30 ppt is also higher than the EPA’s Health Advisories and what many predict will be the EPA’s proposed enforceable drinking water limit.  Future legal arguments challenging the EPA will likely say that the EPA is acting by ignoring the science and putting politics over the merits of scientific endeavor.

Nevertheless, whether the arguments challenging the EPA are found to be meritorious in litigation or not, the Canadian report will certainly provide ammunition to parties looking to challenge EPA action.

Conclusion

Now more than ever, the EPA is clearly on a path to regulate PFAS contamination in the country’s water, land and air. The EPA has also for the first time publicly stated when they expect such regulations to be enacted. These regulations will require states to act, as well (and some states may still enact stronger regulations than the EPA). Both the federal and the state level regulations will impact businesses and industries of many kinds, even if their contribution to drinking water contamination issues may seem on the surface to be de minimus. In states that already have PFAS drinking water standards enacted, businesses and property owners have already seen local environmental agencies scrutinize possible sources of PFAS pollution much more closely than ever before, which has resulted in unexpected costs. Beyond drinking water, though, the EPA PFAS Roadmap shows the EPA’s desire to take regulatory action well beyond just drinking water, and companies absolutely must begin preparing now for regulatory actions that will have significant financial impacts down the road.

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