Category: Environmental Law

22 States Join Challenge to Massachusetts’ Question 3

  • Similar to California’s Proposition 12, Massachusetts’ Prevention of Farm Animal Cruelty Act (also known as “Question 3”) imposes animal welfare standards for hens, sows, and veal calves raised in Massachusetts and makes it unlawful for businesses to sell eggs, veal, or pork that they know to be in violation of these standards (even if the animals were raised out of state).
  • A July 22nd order from the U.S. District Court of Massachusetts dismissed a challenge to the law brought by various pork producers, holding that the law was not preempted by the Federal Meat Inspection Act (FMIA) because it does not regulate how slaughterhouses operate. This decision has been appealed to the First Circuit Court of Appeals.
  • Last month the pork producers’ appeal was joined by Iowa (the top pork-producing state) as well as 21 other states. The states’ brief argues that the law will increase costs for pork producers (and prices for consumers) and that such state laws, if upheld, could create a regulatory maze of differing state requirements. We note that such arguments were not foreclosed by the Supreme Court’s 2023 Proposition 12 decision (National Pork Producers Council v. Ross) which held that such laws violate the dormant commerce clause if the “burden imposed on interstate commerce” is “clearly excessive in relation to the putative local benefits.” Nevertheless, it’s not clear how such a fact-based argument can be evaluated on appeal. The states’ brief also latches onto Justice Kavanaugh’s concurring opinion in National Pork Producers Council v. Ross and states that Question 3 “may also implicate other constitutional provisions like the Import-Export Clause and the Full Faith and Credit Clause.”
© 2024 Keller and Heckman LLP
For more on Farm Animals, visit the NLR Biotech Food Drug section.

A Guidebook to Lawsuits Over PFAS, or Forever Chemicals

Lawsuits over the effects of per and polyfluoroalkyl substances (PFAS) have become some of the most momentous legal battles since the Big Tobacco lawsuits. PFAS compounds, also known as “forever chemicals,” are used in so many different products that you are almost guaranteed to have one in your home. Since 2000, it has been discovered that these chemicals do not break down, have contaminated numerous water sources in America, that virtually everyone has been exposed to them, and that they carry serious health risks, including several types of cancer.

Already, PFAS manufacturers and other companies that use PFAS in the course of their daily business have paid over $11 billion in PFAS lawsuits, and that is just to mitigate the damage of PFAS exposure by cleaning up contaminated soils and waters. The lawsuits to compensate victims of PFAS exposure are just beginning, and may eclipse this massive total.

What are PFAS Chemicals?

PFAS chemicals are synthetic compounds that have multiple fluorine atoms attached to a chain of alkyl, which includes carbon atoms. There are thousands of different compounds that fall into the category of PFAS chemicals. Importantly, though, the fluorine-carbon bond that is present in all of them is one of the strongest in organic chemistry, with no natural processes for breaking it down. As a result, once a PFAS compound is created, it will continue to be a PFAS compound until something is done to it to break down its chemical structure, like superheating it when it is in water.

What are They Used For?

PFAS chemicals have been used by several major corporations for a variety of applications since they were first used to invent Teflon in 1938. Broadly speaking, PFAS chemicals are extremely useful at resisting, cleaning, or preventing:

  • Heat
  • Water
  • Stains
  • Grease
  • Oil

These broad applications, however, have meant that they have been used in a huge number of specific ways. For example, PFAS chemicals are included in the following products to resist water:

  • Paint
  • Clothing
  • Raincoats
  • Tents
  • Shoes
  • Personal care products, like mascara and sunscreen

As a heat resistant chemical, PFAS compounds are frequently used in:

  • Non-stick cookware
  • Electrical wire insulation
  • Firefighting foam
  • Building materials, including adhesives and insulation

As a stain resistant material, PFAS chemicals have been used in:

  • Carpeting
  • Stain-resistant clothing
  • Window curtains
  • Furniture and varnishing
  • Dental floss
  • Food packaging

PFAS chemicals have also been used as oil- and grease-resistant products, like:

  • Lubricants
  • Hydraulic fluids
  • Pizza boxes and microwave popcorn bags

The practical effect of all of this is that PFAS chemicals are everywhere. There are very few days that you do not interact with one. Worse, because the chemical structure of PFAS compounds do not break down, when they are used or discarded they can contaminate the area around them.

What Have PFAS Chemicals Contaminated?

Virtually everything.

In the early days after PFAS chemicals started to get used for a variety of consumer products, the public and the companies behind the compounds disposed of them with no regard or understanding for the dangers that they were causing.

That lack of understanding by the corporations behind PFAS chemicals, however, began to disintegrate in the 1970s. It was around then that 3M, one of the leading PFAS manufacturing companies, discovered its PFAS chemicals inside fish in local waterways.

Rather than sound the alarm, though, 3M and its competitors continued to dispose of used or unwanted PFAS materials in whatever means they wanted or were most convenient at the time. They burned them, buried them, or dumped them into the water. Some PFAS manufacturers even developed a new firefighting foam, aqueous film forming foams (AFFFs), that relied heavily on PFAS chemicals to put out fires involving airplane jet fuel. Firefighters used this PFAS containing firefighting foam on actual fires at airports and trained with it on controlled fires at airports across the country.

The PFAS chemicals in the foam leeched into the soil and waterways near these airports for decades.

The problem was not discovered, at least not by regulators from the federal government, until 1998. That was when the U.S. Environmental Protection Agency (EPA) learned of an internal study by 3M. In that study, researchers exposed pregnant rats to PFAS materials. Inevitably, the newborn rats died within a few days. Alarmed by the news, the EPA began to investigate in an effort to regulate PFAS.

It was also at this time that a cattle farmer in West Virginia lost his animals to a mysterious health condition. Suspecting that the culprit was a major chemical plant upriver that was owned by PFAS manufacturer DuPont, the farmer sued. Over the next couple of years, the PFAS litigation expanded into a class action of over 3,500 plaintiffs and multiple water districts in the West Virginia region. A temporary settlement was reached in which DuPont would provide $30 million of funding for an independent health and environmental study to address PFAS contamination in the soil and water, the C8 Science Panel.

The findings of this Panel and subsequent studies were dire: There was PFAS contamination virtually everywhere. It was in the soil. It was in the water. It was in the animals that ate plants from the soil and that drank the water. Fish from contaminated waterways had especially high levels of PFAS chemicals in them. And PFAS chemicals were in human beings.

Who Has Been Exposed to Them?

According to one study, 95 percent of Americans had a detectable amount of PFAS chemicals in their blood.

Anyone who is exposed to PFAS chemicals has a risk of ingesting it or it getting into their body some other way – PFAS chemicals are readily absorbed through the skin, and can even get inside your body through your tear ducts. The most common way for your PFAS exposure to become PFAS contamination are:

  • Eating contaminated food or drinking contaminated water
  • Touching anything with PFAS chemicals in it, including clothing and soil
  • Inhaling contaminated dust or air
  • Swallowing anything that has PFAS chemicals in it, like makeup or lipstick
  • Being in contaminated air, which can get into your body through your skin pores and sweat

This means different people are at higher risk of PFAS exposure and contamination than others.

For example, people who live in or near communities that have PFAS industries that emit the chemical into the air are likely to get exposed to the dangerous chemical every single day. Firefighters who use or train with PFAS-heavy AFFF are likely to get severe exposure to the chemical whenever they use the foam, but especially when they use it on a real fire, which burns the chemical and releases it into the air where it is more easily inhaled or absorbed through the skin.

Once they are in your body, PFAS chemicals work their way into your bloodstream. Once there, they pass through your body as your blood circulates. This takes them through all of the organs that handle your blood, including your kidneys and liver. While these organs are responsible for breaking down toxins in your blood, they cannot handle PFAS chemicals. Unless PFAS chemicals are excreted somehow, they will continue to pass through your organs, causing harm to them each time they go by.

Excreting PFAS chemicals seems to be difficult. Studies have found that many people do not excrete PFAS chemicals in their urine very well, though others can do it better. These variations in excretion mean that similar people with similar exposures to PFAS chemicals may have different levels of contamination.

Aside from urinating, the only ways to get PFAS chemicals out of your body are to bleed out contaminated blood and to breastfeed, though breastfeeding just gives the contamination to the newborn child who drinks the milk.

What Health Risks Come With PFAS Contamination?

It is important to know that there is still a lot that researchers have to learn about the health conditions caused by PFAS contamination. Collecting more data may connect new health conditions to high levels of exposure to the chemical, or may even undermine what we think we know at this point.

Right now, though, medical research has found that exposure to toxic PFAS chemicals and high levels of PFAS contamination are associated with higher risks of:

  • Liver damage and cancer
  • Kidney cancer
  • Prostate cancer
  • Testicular cancer
  • Thyroid Disease
  • Fertility problems
  • Pregnancy issues, including:
    • Fetal death
    • Low birth weight
    • Developmental delays in newborns
    • Preeclampsia
    • Hypertension
  • Obesity
  • Hormonal disruption and irregularities
  • Dysfunction in the immune system
  • High cholesterol

Some of these conditions are debilitating. Others may prove to be fatal.

Have There Been Any Settlements?

At this point, the only lawsuits that have been settled by PFAS manufacturers have been those brought by public municipalities and water districts. These class actions and multidistrict litigation (MDL) cases demanded compensation from these companies for the costs of decontaminating soil and upgrading water filtration system to eliminate PFAS from the drinking water.

Already, though, these lawsuits have recovered over $11 billion in settlements.

The first settlement is probably the most telling. This was the West Virginia case that led to the creation of the C8 Science Panel. In 2005, the Panel was created as a part of a temporary settlement that also required DuPont and its spin-off company, Chemours, to pay $71 million and cover the costs of fixing local water treatment facilities.

After the C8 Science Panel began publishing its findings, though, DuPont and Chemours reached a final settlement agreement of $671 million.

Both the settlement and the Panel’s findings led to numerous other studies, as well as to lawsuits by water districts against PFAS manufacturers.

The biggest of these has proven to be the MDL consisting of claims of over 300 water municipalities against the company 3M. This one nearly went to a bellwether trial, settling at the last moment in June, 2023, for between $10.3 billion and $12.5 billion, with the final amount depending on the amount of PFAS contamination that is found in the water. A similar lawsuit against DuPont and its subsidiaries and spin-offs settled soon thereafter for $1.185 billion. More recently, the MDL against Tyco Fire Products, one of the companies behind the firefighting foam AFFF, settled in April, 2024, for $750 million, and the one against BASF settled in May for $316.5 million.

What About Mass Tort Claims?

These massive settlements, totaling over $11 billion, are just to cover the costs of cleaning up the soil and water of the plaintiff municipalities. We have not even begun to recover compensation for the individual victims who have suffered the healthcare issues connected to PFAS exposure and contamination.

Several of these cases are ongoing, though.

Some are being pursued by small groups of plaintiffs against smaller PFAS businesses, like this Connecticut community that is suing a local paper company for contaminating local waterways with PFAS chemicals.

Many more, however, have been consolidated into an MDL in South Carolina. As of July, 2024, it had more than 9,000 claims in it. This MDL, though, is strictly concerned with PFAS exposure from AFFF firefighting foam. However, it does include individual plaintiffs who have suffered actual harm from PFAS exposure, rather than public municipalities. These individual plaintiffs are demanding compensation for their adverse health conditions, medical monitoring, and even for the costs of cleaning up contaminated private property or for the reduction in property values caused by the contamination.

According to PFAS mass tort lawyer Dr. Nick Oberheiden, founding partner of the national law firm Oberheiden P.C., “It seems safe to say that these individual claims for compensation related to PFAS exposure and contamination are going to continue to get filed for decades into the future. One likely outcome is that an MDL will form for non-AFFF specific claims related to medical conditions and property value loss due to PFAS contamination. Victims who have been exposed to PFAS chemicals could then join the MDL and benefit from the expedited process that it entails. If PFAS manufacturers and defendants go bankrupt, we will likely see a trust fund being created, similar to how asbestos manufacturers handled the thousands of cases against them.”

Oberheiden P.C. © 2024
by: Dr. Nick Oberheiden of Oberheiden P.C.
For more news on PFAS Litigation, visit the NLR Environmental, Energy, & Resources section

Mass. Appeals Court Declares Winner in Longstanding Land-Use Dispute Between Northeastern University and Town of Nahant

The Nahant Preservation Trust, the town of Nahant, and certain Nahant residents have suffered another loss in their years-long legal battle to stop Northeastern University from expanding its Marine Science Center, located on East Point in Nahant. The Massachusetts Appeals Court recently affirmed the dismissal of the legal actions, finding that the plaintiffs had no reasonable expectation of proving that Northeastern dedicated the 12 acres of land at issue to the public for use as an ecological preserve.

The dispute – and the Appeals Court decision – required an analysis of the “public dedication doctrine” to determine whether the land was subject to Article 97 of the Amendments to the Massachusetts Constitution. Art. 97 provides, in part, that property “taken or acquired” for conservation purposes “shall not be used for other purposes” without approval by a two-thirds vote of each branch of the state legislature. In Nahant Preservation Trust v. Northeastern University (pdf), the Appeals Court concluded that the land at issue is not subject to Art. 97.

Land is dedicated to a public purpose when the landowner’s intent to do so is clear and unequivocal, and when the public accepts the dedication by actually using the land for the public purpose. In 2017, the Supreme Judicial Court (SJC), in Smith v. City of Westfield, expanded the reach of Art. 97 by concluding that municipal parkland may be protected even if not officially taken or acquired, as long as it was “designated” for an Art. 97 purpose.

The Nahant dispute arose when Northeastern announced plans to expand its Marine Science Center located on a peninsula known as East Point. The plaintiffs contended that Northeastern had permanently dedicated the 12 undeveloped acres of its land to the public for use as an ecological preserve and for passive recreation. Therefore, they argued, the land was subject to Art. 97 and the project could not proceed without legislative approval. The plaintiffs compiled and presented to the superior court judge a substantial record, including historical documents concerning Northeastern’s acquisition of the land, which had been used for military purposes by the United States Army and Navy in the 1940s and 1050s. The evidence also included documents that reflected the Town of Nahant’s decision in 1964 not to acquire the property, despite the conservation commission’s desire to have at least a scenic pathway along the shoreline of the property.

Although the summary judgment record contained conflicting evidence regarding the extent of public access and use of Northeastern’s property by town residents, the courts accepted that some town residents had used the area for general recreation over the years. There was evidence that Northeastern had permitted some recreational use of the land. The Appeals Court noted in its decision, however, that the plaintiffs must prove that the disputed land was actually dedicated to the public.

In rejecting the plaintiffs’ arguments, the Appeals Court stated that the public dedication doctrine requires a property owner’s acts and declarations to be “deliberate, unequivocal and decisive, manifesting a clear intention permanently to abandon his property to the specific public use.” The Court noted that the SJC’s finding in Smith that there had been a dedication was based on an acceptance of Federal funds to rehabilitate a playground with the proviso that the city was surrendering its ability to convert the playground to a use other than public outdoor recreation.

The Appeals Court parsed the evidence on which the plaintiffs relied to demonstrate that Northeastern had “clearly and unequivocally” intended to dedicate the disputed land to the public. The plaintiffs pointed to the public’s use of the land as evidence of Northeastern’s intent to dedicate the property. Citing precedent from 1873 to Smith, the Appeals Court stated that “public use, alone, is not enough to prove a public dedication, particularly in circumstances like those present [in Nahant].”

Based on its review of the extensive summary judgment record, in the light most favorable to the plaintiffs, the Appeals Court concluded that the plaintiffs had no reasonable expectation of proving that Northeastern dedicated the 12 acres at issue to the public for use as an ecological preserve. It appears that Northeastern may finally proceed with its plans announced in 2018 to build a new research facility at its Marine Science Center in Nahant.

©2024 Pierce Atwood LLP. All rights reserved.

by: Michelle N. O’Brien of Pierce Atwood LLP

For more news on Environmental Land Dedication Disputes , visit the NLR Environmental, Energy, & Resources section.

White House OSTP Releases PFAS Federal R&D Strategic Plan

The White House Office of Science and Technology Policy (OSTP) announced on September 3, 2024, the release of its Per- and Polyfluoroalkyl Substances (PFAS) Federal Research and Development Strategic Plan (Strategic Plan). Prepared by the Joint Subcommittee on Environment, Innovation, and Public Health PFAS Strategy Team (PFAS ST) of the National Science and Technology Council, the Strategic Plan provides a federal strategy and implementation plan for addressing the strategic areas identified in the 2023 Per- and Polyfluoroalkyl Substances (PFAS) Report (PFAS Report). The Strategic Plan is intended to be a companion document to the PFAS Report. The activities described in the Strategic Plan are reviewed through the Office of Management and Budget (OMB) annual budget process and subject to available resources.

Background

As reported in our March 16, 2023, blog item, the PFAS Report provides an analysis of the state of the science of PFAS and information that will be used to direct the development of a federal strategic plan. The PFAS Report focuses on the current science of PFAS as a chemical class, identifies scientific consensus, and portrays uncertainties in the scientific information where consensus is still sought. The PFAS Report identifies four key strategic areas that, when addressed, will generate actionable information to address PFAS: removal, destruction, or degradation of PFAS; safer and environmentally friendlier alternatives; sources and pathways of exposure to PFAS; and toxicity of PFAS. The gaps and opportunities identified in the PFAS Report were used to develop the Strategic Plan.

Strategic Plan

Based on the four strategic areas presented in the 2023 PFAS Report, the PFAS ST identified four strategic goals that will drive federal research and development (R&D) efforts regarding PFAS:

  • Provide relevant, high-quality scientific data that increase the understanding of PFAS exposure pathways to inform federal decisions that reduce risks to human health and the environment;
  • Effectively and equitably communicate federal work and results regarding PFAS R&D through engagement with impacted communities and federal, Tribal, state, and local agencies;
  • Identify research and technologies to address PFAS contamination and mitigate the adverse impacts on communities; and
  • Generate information that facilitates informed procurement decisions by federal agencies, manufacturers, and consumers regarding products that contain or use PFAS and PFAS alternatives to reduce adverse human health and environmental effects.

According to the Strategic Plan, the PFAS ST identified five R&D strategies within the strategic research areas that address the identified knowledge gaps. The R&D strategies and select tasks to achieve the objectives within each strategy include:

  • Understand PFAS exposure pathways to individuals and communities:
    • Further characterize potential PFAS exposures in the built environment, including schools, workplaces, and other indoor/household environments. According to the Strategic Plan, this would include the co-occurrence and use of consumer products and understanding the lifecycle of products with regard to PFAS exposure;
    • Initiate studies regarding PFAS co-exposure and potential interactions with other contaminants (including other PFAS) in environmental samples, such as nano- and microplastics, petroleum constituents, metals, pesticides, and pharmaceuticals;
    • Initiate and continue studies of the physical-chemical properties of PFAS and mixtures of PFAS;
    • Investigate additional pathways and routes of exposure, such as direct contact, dermal absorption, oral ingestion, and inhalation from indoor and outdoor environments (residential, consumer, and occupational exposures); and
    • Develop and support studies of PFAS exposures in indoor environments through collection of dust, air, consumer products, and other media where biomonitoring may also be conducted;
  • Address current PFAS measurement challenges through the development of standards, advanced sampling, and analytical methodologies:
    • Develop and refine analytical methods and data collection methods to evaluate PFAS content, migration, and emissions from consumer, commercial, and industrial products, and their impact on workplace and indoor environments;
    • Develop testing programs and methods related to quantifying PFAS content, migration, and emissions in animal/livestock feed, food and food packaging, indoor exposure (dust, home/office materials), workplace settings, and consumer products; and
    • Develop and validate real-time, rapid, and remote PFAS screening methods using analytical sensors, PFAS proxies, passive sampling devices, and other novel technologies for the detection of PFAS in media;
  • Understand the toxicological mechanisms, human and environmental health effects, and risks of PFAS exposure:
    • Develop scientifically supported classification schemes for PFAS with respect to adverse impacts on human health and the environment;
    • Develop and support research regarding the human toxicity and ecotoxicity testing of PFAS as mixtures with PFAS and other co-occurring chemicals;
    • Support research to understand further the mechanism of action of PFAS toxicity, advance development of adverse outcome pathways, and understand the impact of PFAS mixture toxicities when evaluating cumulative health effects;
    • Develop and support epidemiological studies designed to identify communities near significant sources of PFAS contamination that may have environmental justice concerns, including occupationally exposed populations and populations, communities, and/or lifestages that are more susceptible to PFAS exposure or adverse health outcomes;
    • Explore the development of a federal data-sharing strategy to use interagency toxicological and epidemiological data to determine human health endpoints of concern from PFAS exposure; and
    • Develop classification strategies that enable grouping of PFAS by hazard identification, exposure assessment, and dose-response studies in support of risk assessments;
  • Develop, evaluate, and demonstrate technologies for the removal, destruction, and disposal of PFAS:
    • Continue to support the foundational research that advances technologies for the destruction of PFAS by both thermal and non-thermal approaches;
    • Support the implementation of removal and destruction technologies that apply to discharge and releases at the point of manufacturing; and
    • Develop and implement models to evaluate technology performance, short-term and long-term costs, energy demands, scalability, and the composition of treated materials that are released to the environment;
  • Identify PFAS alternatives and evaluate their human health and environmental effects:
    • Engage with academic and private sector industrial researchers to support the development of novel, less toxic alternative chemistries and processes for sustainable PFAS alternatives;
    • Identify and evaluate critical and essential uses of PFAS within individual agencies and sectors;
    • Develop an interagency-aligned evaluation framework for prioritizing research on specific PFAS alternatives that includes considerations regarding sustainability; performance; viability and timeframe to transition; dependency on foreign sources of materials; criticality of the current product to national security, critical infrastructure, climate change mitigation, and public health; and criticality of the need for a replacement product or process;
    • Support research to advance sustainable manufacturing and circularity of PFAS-based processes and products to preserve current critical and essential uses, which will enable an orderly transition to PFAS alternatives in critical manufacturing sectors that are dependent on PFAS;
    • Develop a database of the current commercial inventory of alternative materials and products with relevant chemical and toxicological information, manufacturer production capacity, and performance comparison of the alternatives to PFAS-containing materials and products; and
    • Continue to assess human health and environmental effects posed by alternative materials and products for use in comparison to other product formulations, including PFAS-containing product formulations.

Commentary

Bergeson & Campbell, P.C. (B&C®) acknowledges that OSTP’s PFAS Strategy may benefit from the U.S. Environmental Protection Agency’s (EPA) regulatory activities under the Toxic Substances Control Act (TSCA) and other initiatives. We provide below representative examples of these activities.

Between 2022 and 2024, EPA issued TSCA Section 4 test orders requiring manufacturers and/or processors to perform various studies on four PFAS (i.e., 6:2 fluorotelomer sulfonamide betaine [6:2 FTSB], trifluoro(trifluoromethyl)oxirane [HFPO], 2,3,3,3-tetrafluoro-2-heptafluoropropoxy) propanoyl fluoride [HFPO-DAF], and 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8-Heptadecafluoro-N-(2-hydroxyethyl)-N-methyloctane-1-sulfonamide [NMeFOSE]).

EPA also intends on initiating ten additional TSCA Section 4 test orders per year on PFAS between fiscal year (FY) 2024 and FY 2026 (i.e., October 1, 2024-September 30, 2027). EPA’s activities under TSCA Section 4 may lead to the development of data that provide a better understanding of the human health and environmental effects of specific types of PFAS.

The TSCA Section 8(a)(7) rule on the reporting and recordkeeping of manufacture and import of PFAS will provide additional information on PFAS uses, production volumes, disposal, exposures, and hazards. In addition, EPA’s publication of its updated PFAS category analysis may help frame how to use data on PFAS for which testing has been (or is in the process of being) completed to fill data gaps on related PFAS.

Further, EPA’s Office of Research and Development (ORD) and Office of Land Use and Emergency Management (OLEM) have made significant contributions on analytical methods for detecting PFAS in various media and guidance for destroying and disposing of PFAS and PFAS-containing materials, respectively. The TSCA Section 8(a)(7) information along with EPA’s advancements with identifying PFAS in environmental media may aid with identifying those PFAS and the associated uses that lead to the greatest environmental releases.

Collectively, EPA’s activities on PFAS will advance the objectives of OSTP’s PFAS Strategy. This information may also aid with differentiating the types of PFAS that present the greatest concerns to human health and the environment versus those chemistries that do not. After all, many chemical substances, including pharmaceuticals and pesticides, meet one or more of the existing definitions for PFAS and have clear public health benefits, yet do not present the same concerns as those PFAS that have significant concerns (e.g., perfluorooctanoic acid).

©2024 Bergeson & Campbell, P.C.
For more news on PFAS Federal R&D Strategic Plans, visit the NLR Environmental Energy Resources section.

Massachusetts SJC Rules in Favor of Insureds for Ambiguous Insurance Policy Term

In Zurich American Insurance Company v. Medical Properties Trust, Inc. (and a consolidated case[1]) (Docket No. SJC-13535), the Supreme Judicial Court of Massachusetts ruled in favor of insureds in a dispute over an ambiguous term in two policies insuring Norwood Hospital in Norwood, Massachusetts. A severe storm with heavy rain caused damage to the hospital basement and to the hospital’s main buildings caused by seepage through the courtyard roof and parapet roof. The owner of the Hospital, Medical Properties Trust, Inc. (“MPT”) and the tenant, Steward Health Care System LLC[2] (“Steward”), both had insurance policies for the Hospital, MPT’s coverage being through Zurich American Insurance Company (“Zurich”), and Steward’s through American Guarantee and Liability Insurance Company & another (“AGLIC”). Both policies had coverage of up to $750 and $850 million but lower coverage limits for damage to the Hospital for “Flood” at $100 and $150 million (“Flood Sublimits”). Both Steward and MPT submitted proof of loss claims to their respective insurers that exceeded $200 million; the insurers responded that damage to the hospital was caused by “Flood”, which limits both MPT and Steward to their respective Flood Sublimits. The policy provision “Flood” is defined as “a general and temporary condition of partial or complete inundation of normally dry land areas or structures caused by…the unusual and rapid accumulation or runoff of surface waters, waves, tides, tidal waves, tsunami, the release of water, the rising, overflowing or breaking of boundaries of nature or man-made bodies of water.”

The insurers, and MPT and Steward had differing opinions on the definition of “surface waters.” Litigation commenced to determine the extent of coverage available to MPT and Steward for damage to the hospital. The parties agreed that the damage to the basement was caused by Flood, and therefore subject to the Flood Sublimits. However, the parties disagreed as to whether the damage caused by rain seeping in through the courtyard roof and parapet roof was caused by “Flood” because of ambiguity in the definition of Flood. The United States District Court for the District of Massachusetts held that the term “surface waters” in both policies’ definition of “Flood” included rainwater accumulating on the rooftop. The judge allowed an interlocutory appeal due to the substantial difference in opinion of the term “surface water” under the definition of “Flood.” The Court noted that case law across the country is divided on this issue. MPT and Steward appealed, and the First Circuit certified a question to the Massachusetts Supreme Judicial Court (SJC), “Whether rainwater that lands and accumulates on either (i) a building’s second-floor outdoor rooftop courtyard or (ii) a building’s parapet roof and that subsequently inundates the interior of the building unambiguously constitutes ‘surface waters’ under Massachusetts law for the purposed of the insurance policies at issue?”

The SJC concluded that the meaning of “surface waters” and the definition of “Flood” under the policies are ambiguous in regard to the accumulation of rainwaters on roofs, finding that ambiguity is not the party’s disagreement of a term’s meaning but rather where it is susceptible of more than one meaning and reasonably intelligent persons would differ as to which meaning is the proper one. The SJC noted there is no consistent interpretation in case law for “surface waters” to include rainwater accumulating on a roof. Reasoning that if the policy language is ambiguous as to its intended meaning, then the meaning must be resolved against the insurers that drafted the terms, as they had the opportunity to add more precise terms to the policy and did not do so.

This case is an example of the importance for all parties to closely review the language of their insurance coverage to ensure that coverage is consistent with their lease obligations. Additionally, this dispute also draws attention to the importance of casualty provisions in leases. It is important to negotiate the burden of costs in the event of caps or insufficient insurance, along with termination rights for each party.

[1] Steward Health Care System LLC vs. American Guarantee and Liability Insurance Company & another.

[2] Apart from this litigation, the future of Norwood Hospital as a hospital is uncertain as it has not been open for four years and Steward Health Care System LLC has filed for bankruptcy protection.

© 2024 SHERIN AND LODGEN LLP
For more news on Massachusetts SJC Rulings, visit the NLR Real Estate section.

Workplace Safety Concerns for Florida Employers in Anticipation of Hurricane Helene

Tropical Storm Helene is projected to hit Florida’s Gulf Coast as a major hurricane later this week, and evacuations are already underway in parts of the state. Employers are likely to face inevitable workplace safety risks with the storm and recovery.

Quick Hits

  • Tropical Storm Helene is expected to make landfall in Florida as a major hurricane as early as September 26, 2024.
  • Governor Ron DeSantis has declared a state of emergency for sixty-one counties across the state.
  • Employers may want to consider their obligations to protect workers and maintain a safe workplace and begin preparations for the hurricane response.

After developing over the Caribbean, Tropical Storm Helene is expected to “rapidly intensify” into a “major hurricane” as it moves over the Gulf of Mexico before making landfall on Florida as early as Thursday, September 26, according to the National Hurricane Center.

On Monday, September 23, Governor Ron DeSantis declared a state of emergency for forty-one counties in Florida. A day later, on September 24, the governor issued a new executive order expanding the emergency order to most of Florida’s sixty-seven counties.

By the time the the storm the storm makes landfall, it is expected to have intensified into at least a Category 3 hurricane, which can bring winds of up to 130 mph and can cause storm surges greater than ten feet. The storm is projected to affect the entire Gulf Coast of Florida as it moves up through the Florida panhandle and into the Southeastern United States.

In total, sixty-one Florida counties are under a state of emergency: Alachua, Baker, Bay, Bradford, Brevard, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Escambia, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Holmes, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Monroe, Nassau, Okaloosa, Okeechobee, Orange, Osceola, Pasco, Pinellas, Polk, Putnam, Santa Rosa, Sarasota, Seminole, St. Johns, Sumter, Suwannee, Taylor, Union, Volusia, Wakulla, Walton, and Washington counties.

Workplace Safety Compliance

The Occupational Safety and Health (OSH) Act and Occupational Health and Safety Administration (OSHA) standards require employers to take certain actions to ensure a safe and healthy workplace and make preparations for potential risks, including with regard to events like hurricanes and other natural disasters. Here are some key requirements:

  • General Duty Clause: The OSH Act requires that employers provide a workplace free from recognized hazards that could cause death or serious harm, including preparing for and responding to hurricanes and their related hazards. Employers are further required to protect employees from anticipated hazards associated with the response and recovery efforts employees are expected to perform.
  • Emergency Action Plans (EAPs): Under OSHA standards, many employers must develop and implement EAPs, covering evacuation procedures, emergency contact information, and roles for employees during emergencies, such as hurricanes.
  • Training: Employers are also required to provide training with employees on emergency procedures, including evacuation and shelter-in-place protocols, to ensure they know what to do during a hurricane.
  • Hazard Communication: Employers must inform employees about potential hazards, such as chemical spills or structural damage, that could occur during or after a hurricane.
  • Personal Protective Equipment (PPE): Employers may need to provide necessary PPE for employees involved in clean-up and recovery efforts following the hurricane.
  • Post-Event Safety: Employers may be required to conduct hazard assessments and ensure the workplace is safe before employees return to work after a hurricane.

Next Steps

Given the risks of the hurricane, employers may want to start preparing, if they have not already done so, to ensure the safety of their workplaces and their employees, including communicating emergency plans, and, in some cases, closing or evacuating workplaces entirely.

OSHA has provided more information and resources for employers on preparing for and responding to hurricanes on its website here.

Further, in addition to workplace safety concerns, employers have additional legal obligations or considerations with natural disasters that they may want to incorporate into their disaster management and response plans.

© 2024, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.\
For more news on Florida Workplace Safety, visit the NLR Environmental Energy Resources and Labor Employment sections.

EPA Bans Ongoing Uses of Chrysotile Asbestos

On March 28, 2024, the U.S. Environmental Protection Agency (EPA) issued a final rule under the Toxic Substances Control Act (TSCA) to address to the extent necessary the unreasonable risk of injury to health presented by chrysotile asbestos based on the risks posed by certain conditions of use (COU). 89 Fed. Reg. 21970. According to the final rule, the injuries to human health include mesothelioma and lung, ovarian, and laryngeal cancers resulting from chronic inhalation exposure to chrysotile asbestos. The final rule prohibits the manufacture (including import), processing, distribution in commerce, and commercial use of chrysotile asbestos for chrysotile asbestos diaphragms in the chlor-alkali industry; chrysotile asbestos-containing sheet gaskets in chemical production; chrysotile asbestos-containing brake blocks in the oil industry; aftermarket automotive chrysotile asbestos-containing brakes/linings; other chrysotile asbestos-containing vehicle friction products; and other chrysotile asbestos-containing gaskets. It also prohibits the manufacture (including import), processing, and distribution in commerce for consumer use of aftermarket automotive chrysotile asbestos-containing brakes/linings; and other chrysotile asbestos-containing gaskets. The final rule specifies the compliance dates for these prohibitions. The final rule also includes disposal and recordkeeping requirements for these COUs. The final rule will be effective May 28, 2024.

Manufacturing, Processing, Distribution in Commerce, and Commercial Use of Chrysotile Asbestos Diaphragms in the Chlor-alkali Industry

As of the effective date of the final rule, all persons are prohibited from the manufacture (including import) of chrysotile asbestos, including any chrysotile asbestos-containing products or articles, for diaphragms in the chlor-alkali industry. Beginning five years after the effective date of the final rule, all persons are prohibited from processing, distribution in commerce, and commercial use of chrysotile asbestos for diaphragms in the chlor-alkali industry, except as provided in 40 C.F.R. Section 751.505(c) and (d).

Section 751.505(c) permits a person to process, distribute in commerce, and commercially use chrysotile asbestos for diaphragms in the chlor-alkali industry at no more than two facilities until eight years after the effective date of the final rule, provided that they meet certain conditions.

Section 751.505(d) permits a person who meets all of the criteria of that paragraph to process, distribute in commerce, and commercially use chrysotile asbestos for diaphragms in the chlor-alkali industry at not more than one facility until 12 years after the effective date of the final rule, provided that they meet certain conditions.

Certification of Compliance for Chlor-alkali Industry

A person who processes, distributes in commerce, or commercially uses chrysotile asbestos for diaphragms in the chlor-alkali industry between five years and eight years after the effective date of the final rule must certify to EPA their compliance with all requirements of Section 751.505(c) and provide the following information to EPA: identification of the facility (or facilities) at which, by five years after the effective date of the final rule, the person has ceased all processing, distribution in commerce, and commercial use of chrysotile asbestos; identification of the one or two facilities (no more than two facilities) at which the person will after five years after the effective date of the final rule continue to process, distribute in commerce, and commercially use chrysotile asbestos diaphragms while the facility or facilities are being converted to non-chrysotile asbestos membrane technology; and the name of the facility manager or other contact.

A person who processes, distributes in commerce, or commercially uses chrysotile asbestos for diaphragms in the chlor-alkali industry between eight and 12 years after the effective date of the final rule must certify to EPA their compliance with all requirements of Section 751.505(d) and provide the following information to EPA: identification of the facility at which the person has ceased all processing, distribution in commerce, and commercial use of chrysotile asbestos after five years after the effective date of the final rule but no later than eight years after the effective date of the final rule; identification of the facility at which the person will between eight years after the effective date of the final rule and no later than 12 years continue to process, distribute in commerce, and commercially use chrysotile asbestos diaphragms while the facility is being converted to non-chrysotile asbestos membrane technology pursuant to Section 751.505(d); and the name of the facility manager or other contact.

Other Prohibitions of and Restrictions on the Manufacturing, Processing, Distribution in Commerce, and Commercial Use of Chrysotile Asbestos

Prohibition on Manufacture (Including Import), Processing, Distribution in Commerce, and Commercial Use of Chrysotile Asbestos for Chrysotile Asbestos-Containing Sheet Gaskets in Chemical Production

Beginning two years after the effective date of the final rule, all persons are prohibited from manufacturing (including importing), processing, distributing in commerce, and commercial use of chrysotile asbestos, including any chrysotile asbestos-containing products or articles, for use in sheet gaskets for chemical production, except as provided in Section 751.509(b) and (c). Any sheet gaskets for chemical production that are already installed and in use as of the applicable compliance date are not subject to this distribution in commerce and commercial use prohibition, however.

Section 751.509(b) allows the commercial use of chrysotile asbestos sheet gaskets for titanium dioxide production past the general two-year prohibition; any person may use chrysotile asbestos sheet gaskets for titanium dioxide production until five years after the effective date of the final rule. EPA notes that this provision applies only to commercial use; manufacturing (including import), processing, and distribution in commerce must cease after two years, pursuant to Section 751.509(a).

Section 751.509(c) allows the commercial use of chrysotile asbestos sheet gaskets for processing of nuclear material past the general two-year prohibition: any person who meets the applicable criteria in the paragraph may commercially use chrysotile asbestos sheet gaskets for processing nuclear material until five years after the effective date of this final rule. At the Department of Energy’s Savannah River Site, use may continue until the end of 2037. EPA notes that this provision applies only to commercial use; manufacturing (including import), processing, and distribution in commerce must cease after two years. Section 751.509(c) requires that, beginning 180 days after the effective date of the final rule, all persons commercially using chrysotile asbestos sheet gaskets for processing nuclear material must have in place exposure controls expected to reduce exposure of potentially exposed persons to asbestos, and provide potentially exposed persons in the regulated area where chrysotile asbestos sheet gasket replacement is being performed with a full-face air purifying respirator with a P-100 (HEPA) cartridge (providing an assigned protection factor of 50), or other respirators that provide a similar or higher level of protection to the wearer.

Prohibition on Manufacture (Including Import), Processing, Distribution in Commerce, and Commercial Use of Chrysotile Asbestos-Containing Brake Blocks in the Oil Industry; Aftermarket Automotive Chrysotile Asbestos-Containing Brakes/Linings; Asbestos-Containing Vehicle Friction Products; and Other Asbestos-Containing Gaskets

Beginning 180 days after the effective date of the final rule, all persons are prohibited from manufacturing (including importing), processing, distribution in commerce, and commercial use of chrysotile asbestos, including any chrysotile asbestos-containing products or articles, for commercial use of: oilfield brake blocks; aftermarket automotive brakes and linings; other vehicle friction products; and other gaskets. Any aftermarket automotive brakes and linings, other vehicle friction products, and other gaskets that are already installed and in use as of 180 days after the effective date of the final rule are not subject to this distribution in commerce and commercial use prohibition.

Prohibition on Manufacture (Including Import), Processing, and Distribution in Commerce for Aftermarket Automotive Chrysotile Asbestos-Containing Brakes/Linings and Other Asbestos-Containing Gaskets for Consumer Use

Beginning 180 days after the effective date of the final rule, all persons are prohibited from the manufacturing (including importing), processing, and distribution in commerce of chrysotile asbestos, including any chrysotile asbestos-containing products or articles, for consumer use of: aftermarket automotive brakes and linings; and other gaskets. Any aftermarket automotive brakes and linings and other gaskets that are already installed and in consumer use as of 180 days after the effective date of the final rule are not subject to this distribution in commerce prohibition.

EPA notes that this prohibition does not apply to the consumer use of any chrysotile asbestos-containing aftermarket automotive brakes and linings and other gaskets. EPA states that its authority to regulate commercial use under TSCA Section 6(a)(5) does not extend to consumer use of chemical substances or mixtures. According to EPA, the prohibition on the upstream manufacturing, processing, and distribution of chrysotile asbestos aftermarket automotive brakes and linings and other gaskets for consumer use “will remove these products from the consumer market and over time eliminate their use as these products wear out and are replaced, or the vehicles in which they are components are retired from use.”

Interim Workplace Controls of Chrysotile Asbestos Exposures

For most of the COUs where, pursuant to the final rule, the prohibition on processing and industrial use will take effect in five or more years after the effective date of the final rule, EPA requires owners or operators to comply with an eight-hour existing chemical exposure limit (ECEL), beginning six months after the effective date of the final rule. EPA notes that this requirement applies to the following COUs:

  • Processing and industrial use of chrysotile asbestos in bulk form or as part of chrysotile asbestos diaphragms used in the chlor-alkali industry; and
  • Industrial use of chrysotile asbestos sheet gaskets for titanium dioxide production.

Once a facility has completed the phase-out of chrysotile asbestos and no longer uses chrysotile asbestos in its operations, the interim requirements no longer apply.

EPA states that its intention “is to require interim workplace controls that address the unreasonable risk from chrysotile asbestos to workers directly handling the chemical or in the area where the chemical is being used until the relevant prohibitions go into effect.” EPA notes that its 2020 Risk Evaluation for Asbestos, Part 1: Chrysotile Asbestos (Asbestos Part I) “did not distinguish between employers, contractors, or other legal entities or businesses that manufacture, process, distribute in commerce, use, or dispose of chrysotile asbestos. For this reason, EPA uses the term “owner or operator” to describe the entity responsible for implementing the interim workplace controls in any workplace where an applicable COU subject to the interim workplace controls occurs. The term includes any person who owns, leases, operates, controls, or supervises such a workplace. EPA has proposed to amend 40 C.F.R. Section 751.5 to add a definition of “owner or operator” consistent with this description as part of its proposed TSCA Section 6(a) rules to regulate methylene chloride and perchloroethylene. In this final rule, EPA uses the same definition of “owner or operator” to apply to where it appears in the regulatory text for chrysotile asbestos.

EPA notes that, as mentioned in the proposed rule, TSCA risk management requirements could incorporate and reinforce requirements in Occupational Safety and Health Administration (OSHA) standards. For chrysotile asbestos, EPA states that its approach for interim controls seeks to align, to the extent possible, with certain elements of the existing OSHA standard for regulating asbestos under 29 C.F.R. Sections 1910.1001 and 1926.1101. According to EPA, the OSHA permissible exposure limit (PEL) and ancillary requirements “have established a long-standing precedent for exposure limit threshold requirements within the regulated community.” EPA acknowledges that it is applying a “lower, more protective” ECEL derived from Asbestos Part I. EPA notes that it is not establishing medical surveillance requirements based on the ECEL to align with those under 29 C.F.R. Section 1910.1001, however, and that companies must continue to follow the medical surveillance requirements established by OSHA at 0.1 fiber per cubic centimeter of air as an eight-hour time-weighted average (TWA) level.

Disposal

EPA states that it is implementing the disposal provisions in the proposed rule without significant changes. EPA notes that the disposal provisions at Section 751.513 cross reference existing EPA and OSHA regulations that address asbestos-containing waste disposal. EPA requires that for the chrysotile asbestos diaphragm COU, as well as oilfield brake blocks, other vehicle friction products, and any commercial use of other gaskets and aftermarket automotive brakes and linings COUs, regulated entities must adhere to waste disposal requirements in OSHA’s Asbestos General Industry Standard in 29 C.F.R. Section 1910.1001, including Section 1910.1001(k)(6) requiring waste, scrap, debris, bags, containers, equipment, and clothing contaminated with asbestos that are consigned for disposal to be disposed of in sealed impermeable bags or other closed, impermeable containers. For the chrysotile asbestos sheet gaskets in the chemical production COU, regulated entities must adhere to waste disposal requirements described in OSHA’s Asbestos Safety and Health Regulations for Construction in 29 C.F.R. Section 1926.1101.

EPA notes that additionally, for the chrysotile asbestos diaphragm COU, as well as oilfield brake blocks, other vehicle friction products, and any commercial use of other gaskets and aftermarket automotive brakes and linings, the final rule cross-references the disposal requirements of Asbestos National Emission Standards for Hazardous Air Pollutants (NESHAP) (40 C.F.R. Part 61, Subpart M) at 40 C.F.R. Section 61.150. EPA states that the asbestos NESHAP reduces exposure to airborne asbestos “by generally requiring sealing of asbestos-containing waste material from regulated activities in a leak-tight container and disposing of it in a landfill permitted to receive asbestos waste.” According to EPA, it is not cross-referencing this same NESHAP waste disposal provision for the disposal of chrysotile asbestos-containing waste from sheet gasket processing and use “because EPA did not find unreasonable risk for the disposal of sheet gaskets.”

EPA also requires that each manufacturer (including importer), processor, and distributor of chrysotile asbestos, including as part of products and articles for consumer uses subject to the final rule, dispose of regulated products and articles in accordance with specified disposal provisions. EPA states that these consumer uses are aftermarket automotive brakes and linings and other gaskets. EPA notes that these consumer use supply chain disposal requirements are consistent with those for disposers of aftermarket automotive brakes and linings and other gaskets intended for commercial use. EPA states that it “does not generally have TSCA section 6(a) authority to directly regulate consumer use and disposal, but under TSCA section 6(a) EPA may nonetheless regulate the disposal activity of suppliers of these products, including importers, wholesalers and retailers of asbestos-containing aftermarket automotive brakes and linings, and other gaskets.” The disposal requirements at Section 751.513 will take effect 180 days after the effective date of the final rule.

Recordkeeping

A general records provision at 40 C.F.R. Section 751.515(a) of the final rule requires that, beginning 180 days after the effective date of the final rule, all persons who manufacture (including import), process, distribute in commerce, or engage in industrial or commercial use of chrysotile asbestos must maintain ordinary business records, such as invoices and bills-of-lading related to compliance with the prohibitions, restrictions, and other provisions of this rulemaking and must make them available to EPA for inspection. Section 751.515(b) addresses recordkeeping for certifications of compliance for the chlor-alkali industry required under Section 751.507 of the rule: persons must retain records for five years to substantiate certifications required under that provision and must make them available to EPA for inspection.

Section 751.515(c) of the final rule requires retention of records for interim workplace controls of chrysotile asbestos exposures. The final rule requires owners or operators subject to the exposure monitoring provisions of Section 751.511(c) to document and retain records for each monitoring event. Additionally, Section 751.515(c) requires that owners or operators subject to the interim workplace controls described in Section 751.511 retain certain records.

Section 751.515(d) requires the retention of disposal records. Each person, except a consumer, who disposes of any chrysotile asbestos and any chrysotile asbestos-containing products or articles subject to Section 751.513, beginning 180 days after the effective date of the final rule, must retain in one location at the headquarters of the company, or at the facility for which the records were generated: any records related to any disposal of chrysotile asbestos and any chrysotile asbestos-containing products or articles generated pursuant to, or otherwise documenting compliance with, regulations specified in Section 751.513. All records under this rule must be retained for five years from the date of generation.

Commentary

Bergeson & Campbell, P.C. (B&C®) acknowledges the historic nature of the rule, but it must also be placed into context. First, the rule applies to the few, limited ongoing uses of chrysotile asbestos that were not banned in the 1980s. It does not apply to the asbestos types that may already be in place, such as in old buildings. A ban on the manufacture, import, processing, and use of chrysotile asbestos cannot erase other types of asbestos, including chrysotile asbestos, that are and have been in place for decades. EPA’s Asbestos Part 2 risk evaluation will address the potential risk from such legacy uses and associated disposal activities. That work is underway. Second, EPA concluded that for the limited, ongoing uses of chrysotile asbestos, the only way to mitigate the risk of ongoing import, processing, use, and disposal is to ban chrysotile asbestos, except for the narrow use in brakes on specialized, large cargo aircraft operated by the National Aeronautics and Space Administration (NASA).

In its risk evaluation, EPA concluded that the use of chrysotile asbestos in chlor-alkali production does not present an unreasonable risk if protective measures are used, such as engineering controls, glove boxes, and personal protective equipment (PPE). In the final risk management rule, EPA nevertheless argues that chrysotile asbestos must be banned because the necessary PPE may not be used correctly. If this logic prevails, EPA may be in the awkward situation of needing to ban every substance that it determines as presenting an unreasonable risk when PPE is not used, meaning that EPA will have to ban nearly every substance it reviews under TSCA Section 6 (at least for the foreseeable future) because it is likely that all substances that EPA will review in the next several decades will be sufficiently hazardous for EPA to conclude that the chemical substances present an unreasonable risk from routine, unprotected inhalation and/or dermal exposures. EPA seems to be saying that someone, somewhere, under some circumstances, may decide not to wear protective measures, or not wear PPE correctly and that because of this instance, EPA cannot reduce an unreasonable risk by imposing workplace protective measures. EPA might view asbestos as a special case, but EPA did not qualify its argument in the rule.

EPA’s cost benefit analysis is surprising: EPA estimates benefits from avoided cancer cases to be between $3,000 and $6,000 per year. This is surprising in that a hazardous chemical apparently leads to so little economic benefits if asbestos is banned. The modest value would appear to be evidence that ongoing uses of chrysotile asbestos are largely not a significant health risk. In comparison, EPA’s economic analysis estimated costs ranging from $34 million to $43 million per year of implementing the rule.

EPA’s progress with advancing its TSCA Section 6 rulemaking activities on chrysotile asbestos is commendable. There are, however, several issues with EPA’s Asbestos Part I that are still unresolved and will likely resurface as the bases for any potential challenges to EPA’s rule. The first issue is EPA’s use of the now rescinded 2018 Application of Systematic Review in TSCA Risk Evaluations (the 2018 SR Document). We previously discussed our concerns with EPA’s use of this approach in Asbestos Part I. The crux of the issue is that the U.S. National Academies of Sciences, Engineering, and Medicine (NASEM) reviewed the 2018 SR Document and concluded that “The OPPT approach to systematic review does not adequately meet the state-of-practice.” This conclusion supports that EPA did not fulfill its obligations of complying with the scientific standards under TSCA Section 26. For further discussion, see our memorandum dated April 7, 2022.

The second related issue is EPA’s derivation of an inhalation unit risk (IUR) for chrysotile asbestos and its subsequent use of the IUR for establishing an ECEL. EPA derived the IUR on textile worker populations from two facilities and stated the following in Asbestos Part I: “The epidemiologic studies that are reasonably available include populations exposed to chrysotile asbestos, which may contain small, but variable amounts of amphibole asbestos.” EPA’s use of these studies was controversial and included criticisms in the peer-reviewed literature with one group of experts pointing out that “All 8 cases of pleural cancer and mesothelioma in the examined populations arose in facilities where amphiboles were present.” The same group of experts also stated that “the suggested inhalation unit risk (IUR) for chrysotile asbestos was far too high since it was not markedly different than for amosite, despite the fact that the amphiboles are a far more potent carcinogen.”

It is unclear if EPA’s study selection for deriving the IUR and exclusion of other studies was due to a flawed systematic review process or other issues, such as favoring a pre-determined outcome. The same group of experts mentioned above stated the following about EPA’s peer review on the draft version of Asbestos Part I:

[A] key limitation of the EPA meeting was that the questions that the panelists were asked to address, termed “charge questions,” did not focus on the most pertinent aspects of the document. Thus, by asking questions that avoided the thorny topics regarding chrysotile asbestos which were often poorly focused, the EPA failed to obtain relevant topical insight from the advisory panel.

Readers may find the above statements implausible, yet EPA’s sponsored peer-review activities on formaldehyde supports that they are not. On August 9, 2023, NASEM issued its report titled Review of EPA’s 2020 Draft Formaldehyde Assessment. NASEM stated the following in its report:

The committee…was not charged with commenting on other interpretations of scientific information relevant to the hazards and risks of formaldehyde, nor did its statement of task call for a review of alternative opinions on EPA’s formaldehyde assessment.

The concern with limiting the scope of a peer review is that doing so, at a minimum, creates an appearance of favoring a pre-determined outcome and may ultimately undermine the integrity of the science used in EPA’s decision-making. Either outcome is inconsistent with the scientific standards under TSCA Section 26 and EPA’s recently updated draft Scientific Integrity Policy.

The third issue relates to EPA’s unreasonable risk determination in Asbestos Part I. EPA referenced its 1994 Guidelines for Statistical Analysis of Occupational Exposure Data (the 1994 Guidelines) as the justification for evaluating monitoring samples that were below the limit of detection (LOD). EPA stated that the 1994 Guidelines “call for replacing non-detects with the LOD or LOQ [limit of quantification] divided by two or divided by the square root of two, depending on the skewness of the data distributions.” EPA also stated that “more than half of the samples were non-detectable.” The approach in the 1994 Guidelines conflicts with EPA’s 2008 Framework for Investigating Asbestos-Contaminated Superfund Sites (the 2008 Framework), which states “[w]hen computing the mean of a set of asbestos measurements, samples that are ‘nondetect’ should be evaluated using a value of zero, not ½ the analytical sensitivity [footnote omitted].” EPA did not state its rationale for not using the 2008 Framework recommendations (i.e., replacing non-detects with zero). EPA is, however, aware of the 2008 Framework, as evidenced by its use of the 2008 Framework for estimating cancer risks for less than lifetime exposure from inhalation of chrysotile asbestos.

It is not clear whether the rule will be challenged, but B&C would not be surprised if impacted industries, non-governmental organizations, and other stakeholder groups bring suit. The scientific methods and documents supporting this rule have been publicly challenged specifically, as discussed above, and generally by other expert academics in the field. This is, after all, the first final rule under TSCA Section 6(a) and will be precedent setting for other risk management rules. This rule is not just about asbestos; it reflects how EPA will manage risks for existing chemical substances EPA identifies as high-priority substances under TSCA Section 6. Stay tuned.

©2024 Bergeson & Campbell, P.C.

EPA Delays TSCA PFAS Reporting Deadlines

The Environmental Protection Agency (EPA) just issued a direct final rule amending reporting deadlines for per- and polyfluoroalkyl substances (PFAS) under the Toxic Substances Control Act (TSCA).

As described in our prior client alert, EPA finalized a rule last fall that requires entities that manufacture (including import) or have manufactured PFAS in any year since January 1, 2011 to submit a one-time comprehensive report regarding PFAS uses, production volumes, byproducts, disposal, exposures, and environmental or health effects.

Since EPA is still developing its reporting application to collect this data, and it will not be fully functional by November 2024, EPA has bumped back the start of the data submission period from November 12, 2024 to July 11, 2025.

The data submission period now ends on January 11, 2026, except for article importers that are also considered small manufacturers. Their submission period will end on July 11, 2026.

EPA is not proposing any changes to the scope of reporting under TSCA.

©2024 Pierce Atwood LLP. All rights reserved.
For more news on EPA TSCA Reporting, visit the NLR Environmental Energy Resources section.

EPA Announces 8-Month Delay in Submission Window for TSCA PFAS Reporting Rule

The U.S. Environmental Protection Agency (EPA) is modifying the Toxic Substances Control Act (TSCA) regulation imposing reporting and recordkeeping requirements for perfluoroalkyl and polyfluoroalkyl substances (the Rule) to delay the reporting period by eight months. The Rule, as finalized last year, included a reporting window that would open on November 12, 2024, and close for most companies on May 8, 2025. EPA is now delaying the submission period by eight months. With this delay, the reporting period will open on July 11, 2025, and close, for most companies, on January 11, 2026. EPA is also making a technical correction to address a typographical error in the Rule’s text, and the delay and correction are being announced as a direct final rule that will become effective within 60 days of publication unless the agency receives an adverse public comment within 30 days of publication.

Background on the Rule

As discussed in our previous alert, the Rule sweeps broadly to require reporting on the manufacture (including import) of PFAS in any amount between 2011 and 2022. Companies that imported PFAS-containing articles during this period are also in scope, though these companies can report using a streamlined form. The Rule does not incorporate exemptions typically applied in other TSCA rules, such as for byproducts, impurities, or for most research and development (R&D). The Rule also does not incorporate a de minimis volume threshold. In-scope companies must report online through EPA’s CDX portal.

EPA’s Justification for the Delayed Submission Period

With the 8-month delay, the submission period will begin on July 11, 2025, and, for most companies, end on January 11, 2026. This submission period will end on July 11, 2026, for article importers that are considered small manufacturers. To justify the delay, EPA stated in the preamble that it “is compelled to take this action in response to constraints on the timely development and testing of the software being developed to collect information pursuant to this reporting rule (i.e., the rule’s reporting application).” EPA also cited the agency’s increased responsibilities in implementing TSCA as amended by the 2016 Frank R. Lautenberg Chemical Safety for the 21st Century Act and EPA’s reduced funding as reasons for the delayed reporting period.

Technical Correction in the Regulatory Text

In addition to the delayed reporting period, EPA is correcting a typographical error in the Rule’s paragraph at 40 CFR 705.15(f)(1). Subpart (f) in 40 CFR 705.15 requires companies to submit all existing information concerning the environmental and health effects of a reported PFAS, and paragraph (f)(1) states that each “published study report” submitted on such effects must be reported using Organization for Economic Cooperation and Development Harmonized Templates (OHTs). EPA is amending this requirement to apply to “unpublished study reports,” since, as discussed by EPA in the preamble, requiring OHTs for published study reports was not the intent of the Rule. However, it should be noted that article importers using the streamlined article importer reporting form are not required to submit the information described in subpart (f) in 40 CFR 705.15.

These Changes Are Being Made as a Direct Final Rule

EPA is taking direct final action to implement the delayed reporting window and technical correction because the agency views this as a noncontroversial action and anticipates no adverse comment. This direct final rule is scheduled for publication in the Federal Register on September 5, 2024; the direct final rule will then become effective 60 days after publication unless EPA receives an adverse comment within 30 days of publication. If an adverse public comment is received, EPA will publish a withdrawal in the Federal Register informing the public that the direct final rule will not take effect.

© 2024 Beveridge & Diamond PC
For more news on EPA Reporting Deadlines, visit the NLR Environmental Energy Resources section.

Handling an EPA Inspection: What to Do Before, During, and After the Process

Regardless of a company’s environmental compliance record, facing a U.S. Environmental Protection Agency (EPA) inspection can present significant risks. When conducting inspections, EPA inspectors and technical personnel examine all aspects of companies’ operations, and it is up to companies to demonstrate that enforcement action is unwarranted. When faced with uncertainty, EPA personnel will err on the side of non-compliance with EPA regulations, and this means that companies that are unable to affirmatively demonstrate compliance can find themselves facing unnecessary consequences under federal environmental laws.

With this in mind, all companies need to take an informed, strategic, and systematic approach to defending against EPA inspections. While EPA inspections can present significant risks, companies can—and should—manage these risks effectively. Effectively managing the risks of an EPA inspection starts with understanding what companies need to do before, during, and after the process.

To be clear, while there are several steps that companies can—and generally should—take to prepare for their EPA inspections, there is no single “right” way to approach the inspection process. A custom-tailored approach is critical, as companies facing scrutiny from the EPA must be prepared to address any and all compliance-related concerns arising out of their specific operations.

What to Do Before an EPA Inspection

With this in mind, what can companies do to maximize their chances of avoiding unnecessary consequences during an EPA inspection? Here are five steps that companies should generally take upon learning of an impending visit from EPA personnel:

1. Make Sure You Know What Type of EPA Inspection Your Company is Facing 

One of the first steps to take is to ensure that you know what type of EPA inspection your company is facing. The EPA conducts multiple types of inspections, each of which involves its own protocols and procedures and presents its own risks and opportunities. As the EPA explains:

“Inspections are usually conducted on single-media programs such as the Clean Water Act, but can be conducted for more than one media program. Inspections also can be conducted to address a specific environmental problem (e.g., water quality in a river), a facility or industry sector (e.g., chemical plants), or a geographic (e.g., a region or locality) or ecosystem-based approach (e.g., air or watershed).”

Under the EPA’s current approach to environmental compliance enforcement, most inspections fall into one of five categories:

  • On-Site Inspections – The EPA routinely conducts on-site inspections. During these inspections, EPA personnel may observe the company’s operations, collect samples, take photos and videos, interview company personnel, and review pertinent environmental compliance documentation.
  • Evaluations – The EPA conducts evaluations to assess facility-level compliance under the various federal environmental statutes. These evaluations may be either “full” or “partial,” with full compliance evaluations (FCEs) examining all pertinent areas of compliance and partial compliance evaluations (PCEs) “focusing on a subset of regulated pollutants, regulatory requirements, or emission units at a given facility.”
  • Record Reviews – Record reviews typically take place at an EPA field office or other government location, and they “may or may not be combined with field work.” With that said, in many cases, on-site inspections and record reviews go hand-in-hand.
  • Information Requests – An information request is, “an enforceable, written request for information to a regulated entity, a potentially regulated entity, or a potentially responsible party about a site, facility, or activity.” The EPA uses information requests to “substantiate the compliance status of [a] facility or . . . site,” and the EPA may issue an information request either in connection with or after conducting an on-site inspection.
  • Civil Investigations – The EPA describes civil investigations as, “an extraordinary, detailed assessment of a regulated entity’s compliance status, which requires significantly more time to complete than a typical compliance inspection.” In most cases, a civil investigation will follow an inspection that uncovers significant or systemic compliance failures.

2. Make Sure You Understand the Scope of the EPA’s Inspection 

After discerning the nature of the EPA’s inquiry, the next step is to ensure that you understand its scope. Is the EPA focusing on a specific environmental statute (i.e., the Recovery Act, the Clean Air Act (CAA) or Clean Water Act (CWA)); or, is it conducting a comprehensive assessment of environmental compliance? If the EPA is focusing on a specific environmental statute, is it focusing on all areas of compliance monitoring under the statute, or is it focusing on a particular enforcement priority like resource conservation? Answering these types of questions will be critical for efficiently implementing an informed defense strategy.

3. Locate All Relevant Compliance Documentation 

Once you know what the EPA will be looking for, the next step is determining what it is going to find when they request information. This begins with locating all of the company’s relevant compliance documentation. This will facilitate conducting an internal EPA compliance assessment (more on this below), and it will also allow the company to efficiently respond to document requests and other inquiries during the inspection process.

4. Conduct an Internal EPA Compliance Assessment (if There is Time)

If there is time, it will be important to conduct an internal EPA compliance assessment, like a mock audit, before the EPA’s inspection begins—unless the company has recently completed a systematic environmental compliance audit in compliance with the relevant EPA Audit Protocols. There is incentive for self-policing which incentivizes you to voluntarily discover and fix violations. If there is not time to conduct an internal assessment before the inspection begins, then this should be undertaken in parallel with the company’s inspection defense, with a focus on accurately assessing the risks associated with the inspection as quickly as possible.

5. Put Together Your EPA Inspection Defense Strategy and Team 

Effectively responding to an EPA inspection requires an informed defense strategy and a capable team. A company’s EPA inspection defense team should include appropriate company leaders and internal subject matter experts as well as the company’s outside EPA compliance counsel.

What to Do During an EPA Inspection

Here are some important steps to take once an EPA inspection is underway:

1. Proactively Engage with the EPA’s Inspectors and Technical Personnel 

Companies facing EPA inspections should not take a back seat during the process. Instead, they should seek to proactively engage with the EPA’s inspectors and technical personnel (through their EPA compliance counsel) so that they remain fully up to speed and can address any potential issues or concerns as quickly as possible.

2. Use the Company’s EPA Compliance Documentation to Guide the Process 

For companies that have a strong compliance record and clear documentation of compliance, using this documentation to guide the inspection process can help steer it toward an efficient and favorable resolution.

3. Carefully Assess Any Concerns About Non-Compliance 

If any concerns about non-compliance arise during the EPA inspection process, company leaders should work with the company’s EPA compliance counsel to assess these concerns and determine how best to respond.

4. Work with the EPA’s Inspectors and Technical Personnel to Resolve Compliance Concerns as Warranted 

If any of the EPA’s concerns about non-compliance are substantiated, companies should work with the EPA’s inspectors and technical personnel (through their EPA compliance counsel) to resolve these concerns as efficiently as possible—and ideally during the inspection process so that no follow-up interactions with the EPA are necessary.

5. Focus on Achieving a Final Resolution that Avoids Further Inquiry

Overall, the primary focus of a company’s EPA inspection defense should be on achieving a final resolution that avoids further inquiry. Not only can post-inspection civil investigations present substantial risks, but unresolved compliance concerns can leave companies (and their owners and executives) exposed to the possibility of criminal prosecution in some cases as well.

What to Do After an EPA Inspection 

Finally, here are some key considerations for what to do after an EPA inspection:

1. Complete Any Necessary Follow-Up as Efficiently as Possible 

If any follow-up corrective or remedial action is necessary following an EPA inspection, the company should prioritize completing this follow-up as efficiently as possible. Not only will this help to mitigate any penalty exposure, but it will also help mitigate the risk of raising additional concerns with the EPA.

2. Implement Any Lessons Learned 

If the EPA’s inspection resulted in any lessons learned, the company should also prioritize implementing these lessons learned in order to prevent the recurrence of any issues uncovered during the inspection process. This is true whether implementation involves making minor tweaks to the company’s documentation procedures or completing a substantial overhaul of the company’s environmental compliance program.

3. Use Systematic EPA Compliance Audits to Evaluate and Maintain Compliance 

Systematic auditing is one of the most efficient and most effective ways that companies can evaluate and maintain EPA compliance. For companies that are not using the EPA’s Audit Protocols already, working with experienced outside counsel to implement these protocols will be a key next step as well.

4. Challenge Any Unwarranted Conclusions as Warranted 

If the company’s EPA inspection resulted in unwarranted determinations of non-compliance, seeking to reverse the agency’s conclusions may involve working with its lawyers post-inspection. Depending on the circumstances, it may also involve going to court. Whatever it takes, ensuring that the company does not face unjustified penalties will be essential for both short-term and long-term environmental compliance risk management.

5. Prepare for Further Enforcement Action as Necessary 

If an EPA inspection results in substantial findings of non-compliance, it may be necessary to prepare for further enforcement action. Depending on the circumstances, this could involve facing a civil investigation, a criminal investigation conducted jointly by the EPA and the U.S. Department of Justice (DOJ), or litigation in federal court. Here, too, an informed and strategic defense is essential, and it will be critical to continue working with experienced EPA compliance counsel throughout this process.

Oberheiden P.C. © 2024
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