Category: Environmental Law

DOJ Policy Review of SEPs May Have Big Implications for Company Environmental Settlements

The U.S. Department of Justice (DOJ) is in the midst of a comprehensive policy review regarding the use of Supplemental Environmental Projects (SEPs) in settlements of environmental enforcement actions. This review could potentially have far-reaching implications for companies that seek to settle such actions brought by either the federal government, or in the case of a citizen suit, a non-governmental organization (NGO). It remains to be seen if the ongoing SEP policy review will result in additional limits on the use of SEPs in settlement, thus limiting the flexibility in achieving penalty mitigation that has been a hallmark of environmental enforcement case resolutions for nearly three decades.

SEPs have been popular among both governmental and non-governmental defendants in enforcement cases for nearly thirty years. SEPs allow settling parties to mitigate a portion of a civil penalty in exchange for performance of environmentally beneficial projects. Under long standing SEP policy, settling parties can receive up to a maximum of 80 percent credit towards mitigation of a portion of a civil penalty for funds expended in performance of SEPs. This policy has proven popular in local communities that benefit from the projects, and these benefits are something that is beyond what is required to achieve compliance with the law. In the early 1990s, SEPs tended to be the exception to the norm of environmental enforcement settlements. But during the later 1990s, SEPs became quite common – even typical.

It is possible that the current ongoing review of SEP policy could result in greater scrutiny of use of SEPs in settlements with companies. Further restrictions on the use of SEPs could take many forms, including limitations on the funds expended, greater scrutiny of the nexus of the SEP to the underlying violations, and even potential elimination of the use of SEPs altogether. Typically, settling parties would much prefer including a SEP as part of a settlement, rather than simply paying all of its out-of-pocket costs as a civil penalty, so further restrictions or elimination of SEPs altogether would not be a positive development for the regulated community.

It is clear that the current administration takes a much more skeptical view of the appropriateness of SEPs than any prior administration. This past August, Assistant Attorney General for the Environment and Natural Resources Division (ENRD) Jeffrey Clark issued a memorandum to all ENRD Section Chiefs outlining new limits on the use of SEPs. Under the new policy, the use of SEPs is prohibited in settlements involving state and local governments, which gives less flexibility to both state and local governments as well as DOJ enforcement attorneys in determining appropriate resolution of enforcement cases.

This latest SEP policy memorandum builds on last November’s memorandum from the Attorney General outlining policies and procedure for civil consent decrees and settlements with state and local governments. This November memorandum included a directive that consent decrees “must not be used to achieve general policy goals or to extract greater or different relief from than could be obtained through agency enforcement authority or by litigation the matter to judgment.” Part of the intent of the outlined policy was to ensure accountability of state and local governments as to their policy goals.

Building on this in reference to SEPs, Clark stated “A clearer example of a form of relief that falls within the prohibition in the November 2018 Policy is difficult to imagine.” Clark left open the possibility of limited case-by-case exceptions to the broader policy of the prohibition, under certain limited conditions, pending his further overall review of SEP policies. But Clark further stated that even if certain limitations are satisfied, “there is no guarantee that I will recommend approval . . . “of including a SEP as part of a settlement with a state or local government.”

© 2019 Schiff Hardin LLP

For more Supplemental Environmental Project issues, see the National Law Review Environmental, Energy & Resources law page.

EPA Repeals Obama Rule Defining Waters of the U.S.

On Thursday, September 12, EPA General Counsel Matt Leopold announced EPA’s final rule repealing the 2015 Waters of the United States (“WOTUS”) Rule. Significantly, General Counsel Leopold did not announce the final replacement WOTUS Rule, which was proposed in February of this year; the replacement rule remains at the final rule stage as EPA revises the rule in light of public comment. A recent interview with Administrator Wheeler indicates that it will be a few months before the replacement rule is finalized.

The 2015 WOTUS Rule, also called the Clean Water Rule, significantly extended the Clean Water Act’s jurisdiction over streams and wetlands on the basis of significant hydrological or ecological connections to traditional navigable waters, interstate waters, and territorial seas. The 2015 Rule was successfully challenged by a number of states in federal district courts on the grounds that the 2015 Rule departed from both the statutory text of the Clean Water Act and major Supreme Court decisions guiding how “waters of the United States” is to be interpreted. As a result, the 2015 Rule was effective only in 22 states, creating a patchwork of applicability that frustrated government officials and the regulated community alike.

The repeal of the rule will be effective 60 days from the official notice in the Federal Register. When the repeal rule goes into effect, the entire country will be governed by the pre-2015 status quo. The 1986 WOTUS Rule will be the basis for determining which waterbodies are WOTUS until the replacement rule is effective, and the SWANCC and Rapanos guidance documents remain in effect as well.

© 2019 Bracewell LLP

When Birds Finally Find a Nest

If you’ve walked outside your office building or downtown condo over the past few months, you’ve probably seen electric scooters parked on sidewalks, in bike racks, in the street, on the steps, or even in a local tree. To some, their presence in the urban landscape is but a mere inconvenience, simply ignored as they walk to their car parked a few feet away. To others, their presence generates a hatred so powerful residents find their cause worthy of protesting to their local city council, recklessly throwing the scooters into local waterways, and even starting an Instagram account with over 100,000 followers dedicated to their destruction. But cities around the globe have come to realize that although their presence can be alarming and uncomfortable to some, finding a solution to make them coexist with residents, pedestrians, and commuters will be an essential component of their urban fabric.

As we mentioned in our September 20, 2018 blog post, Have Electric Scooters Pushed Cities Too Far?, many scooter companies have taken the “dark of night” approach when arriving in new cities, often arriving without notice or much consult with local regulators. In response to this strategy, cities like Ann Arbor, Michigan and Indianapolis, Indiana instituted outright bans on the presence of ride-sharing scooters entirely. In some cases, after negotiations with these cities, Birds, Limes, and Spins were allowed back to the cities in small numbers and in highly regulated instances. In other cases, the scooters remained banned with no relief for the companies or residents in sight.

In many cities which opted to ban and continue to ban these scooters, the biggest issue has been parking and reckless driving by commuters and joyriders alike. Understandably, the presence of this new form of transit, intermixed with pedestrian walking space in a seemingly overnight fashion has made some pedestrians cautious and warry while walking to their favorite restaurants. If you read the local news in cities and towns where scooters are abundant, you might think that accidents are commonplace and injuries abundant. A recent UCLA study concluded that over a one year period, scooters contributed to almost 250 injuries with only 4% of riders wearing a helmet. On the other hand, a recent CDC study concluded that only one in every 5,000 scooter rides results in injury. A similar study conducted by the City of Portland found bicycles were involved in more accidents over a four month period compared to scooters, but the study conceded that bike rides often are in greater abundance and longer distance, making the comparison a bit more difficult to verify.

In an effort to build in a ground-up change in rider behavior, many scooter companies have looked to incentivize responsible riders for proper parking and penalize irresponsible riders for poor parking and riding between trips. Bird has recently started rolling out a per-ride credit to riders who park their scooters in geofenced parking areas designated for scooters. Similarly, scooter companies Lime, Bird, and Spin have allowed non-riders to report improperly parked scooters or reckless riders. In an effort to work in tandem with the scooter companies, many cities are encouraging riders to share the road with cars by incorporating protected bike lanes and resurfacing roadways to accommodate scooters and bikers alike. Similarly, some cities like Kansas City, Missouri and Santa Monica, California have repurposed on street parking spaces capable of holding one car with scooter specific parking, capable of holding up to 20 scooters each. Incorporating these parking solutions into the city scape has resulted in 46% greater compliance with parking ordinances than prior to their implementation.

© 2019 Foley & Lardner LLP
For more urban transportation issues, see the National Law Review Utilities & Transport law page.

Politics Trumps Economics? Trump’s Revocation of California’s Waiver Under the Clean Air Act

Today President Trump announced on Twitter that the U.S. was revoking California’s waiver under the Clean Air Act (CAA) which allowed it to impose stricter tailpipe emission standards than the federal ones. California’s Governor Newsom and Attorney General Becerra immediately announced that the state would file suit to challenge the revocation.

While the revocation has been characterized as an immediate rollback, the federal corporate average fuel economy (CAFE) standards[1] established under the previous administration, which are consistent with California’s, remain in place. Last year the Trump administration proposed to rollback those standards, freezing the efficiency and emission rules in 2021 and canceling further increases in stringency set through 2028. The final rule has not yet been issued. It is rumored that it will not be, as the administrative record supporting it has many problems and most acknowledge that it faces significant legal hurdles.

A little historical context is helpful. California began regulating tailpipe emissions in the 1960’s under then-Governor Reagan to combat air pollution. When the CAA was signed by President Nixon in 1970 it included a provision, Section 209, that allows California to establish stricter standards by obtaining a waiver of the normal federal preemption rules from U.S. Environmental Protection Agency (EPA). Once granted, other states then can adopt California’s standards. Thirteen states and the District of Columbia have adopted California’s current standards.

For 30 years, under both Republican and Democratic administrations, Section 209 waivers to combat air pollution were routinely granted. In April 2007, the U.S. Supreme Court decided Massachusetts v. EPA, 549 U.S. 497 (2007), ruling that greenhouse gases (GHGs) are pollutants under the CAA. In December 2007, the Bush administration denied California’s request for a waiver to impose tailpipe emission standards aimed at reducing GHGs. California promptly sued in January 2008, joined by 11 other states. That case was pending before the U.S. Supreme Court when President Obama took office. In 2009, the parties settled the case before the Court issued its decision, and in 2010 the U.S. and California reached an agreement that aligned the state and federal standards. Those standards were subsequently expanded and a new waiver was granted in January 2013. It is that waiver that is now being revoked.

While litigation is inherently uncertain, it appears that California has a good case for challenging the revocation. Not only is the revocation unprecedented, there is no provision in the CAA providing for it. Section 209 only establishes the criteria for granting a waiver; it’s silent as to revocation. In 2013, the U.S. determined that the criteria for the waiver had been met, and both the states and the industry have acted in reliance on that determination for more than 6 years. The U.S. has also asserted that the federal Energy Policy and Conservation Act (EPCA) preempts California’s standards. However, in Massachusetts v. EPA, the Supreme Court ruled that EPCA does not displace EPA’s authority to regulate GHGs, and courts subsequently have extended that rationale to hold that EPCA does not preempt states’ regulation of GHGs under the waiver.

Just as it was in the late aughts, the automobile industry has been put in an extremely difficult position by this dispute. California has the 5th largest economy in the world, and when one adds in the 13 other states that have adopted its standards – states like New York and Pennsylvania – that equates to a large segment of the auto market. Having to produce vehicles to meet two different sets of emission standards would be extremely costly. The industry desperately needs regulatory certainty. Reflecting this, in June, 17 automakers sent a letter to President Trump calling for one national standard that included California, and in July, four automakers reached an agreement of sorts with California on emission standards.

Instead of the regulatory certainty that is needed for the economy to operate efficiently, it appears that this dispute will move into a phase of protracted litigation and years of regulatory uncertainty. The dispute may be good politics for those that want to motivate their base on each side, both Republicans in Washington D.C. and Democrats in Sacramento, but it is pretty clearly bad economics.

[1]   CAFE is, essentially, the average fuel efficiency of an automaker’s fleet of vehicles.

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

For more on the Clean Air Act, see the National Law Review Environmental, Energy & Resources law page.

“Broken Link in the Chain of Liability”: MTCA Decision Highlights Intricacies of Corporate Law

Last week, in a decision highlighting the overlay of environmental and corporate law, a Washington federal district court dismissed claims seeking remediation costs, attorneys’ fees, and a declaratory judgment on liability under the Model Toxics Control Act (MTCA) by the current owner of a service station in Cle Elem against Chevron Corp., Chevron USA, Inc., and unnamed “predecessor companies and subsidiaries.” Short Stop Shell, LLC v. Chevron Corp., No. 1:19-cv-03103-RMP, Dkt. No. 43 (E.D. Wash. Aug. 27, 2019) (Order Granting in Part & Denying in Part Defendants’ Mot. to Dismiss & Denying Plaintiff’s Mot. for Summ. J.). The court rejected the allegation that the Chevron entities were corporate successors to Texaco, Inc., which was believed to be responsible for contamination at the service station.

The court’s findings reflect a limitation on the sweeping liability under MTCA and similar statutes, the relevance of corporate transactions in minimizing such liability, and the potential difficulty of identifying proper corporate defendants before filing lawsuits for cost recovery at contaminated sites.

Site Background – Petroleum Contamination at Service Station

The claims alleged that, until 1984, Texaco owned and operated the service station where contamination had been disposed or released at the property. In 2000, Texaco agreed to indemnify an owner of the service station for “actual petroleum contamination originating from the Property in excess of clean up levels [that] originated from Texaco’s operation of a gasoline … facility … or from deliveries of motor fuels to the station ….” Then, in 2001, Chevron Corp. acquired Texaco in a “reverse triangular merger.”

The plaintiff acquired the property in 2012, decommissioned several underground storage tanks alleged to be leaking, and incurred over $275,000 in remediation costs.

Court Decision – “Broken Link in the Chain of Liability”

Ultimately, the court concluded that the “reverse triangular merger,” in which Texaco merged with a subsidiary of Chevron Corp., did not cause Chevron to assume Texaco’s liabilities. Rather, Texaco remained a “separate entity” as a Chevron subsidiary and Chevron was not a successor to Texaco’s liabilities. The Court found further that suing unnamed defendants was a “disfavored practice” and agreed to strike the “John Doe”-style pleading that included a general reference to the defendants’ “predecessor companies and subsidiaries.”

The court also rejected a judicial estoppel theory that the defendants had already accepted liability “through their actions,” which included interactions between Chevron EMC, a Chevron subsidiary “that manages environmental matters for affiliated companies, including Texaco,” and Ecology. Notably, the court determined that even if, in an ambiguous exchange with Ecology in 2003, Chevron had accepted “potentially liable person status,” that such an acceptance did not amount to a “representation” that the defendants had “expressly assumed Texaco’s liabilities.”

However, litigation is likely to continue. In order to “properly allege a theory of liability,” the court granted the plaintiff leave to incorporate allegations in an amended complaint that the defendants “delivered gasoline products to tanks” that they “knew were leaking.”

© 2019 Beveridge & Diamond PC
For more in environmental contamination, see the National Law Review Environmental, Energy & Resources law page.

Commercial PACE Works: National Study Shows Only One Default Out of 1,870 Deals

A recent study by the US Department of Energy’s Lawrence Berkeley National Lab shows that commercial property assessed clean energy loans (PACE) are growing in popularity and are a good bet for lenders and property owners. Through 2017, projects worth $887 million have been completed, creating more than 13,000 jobs.1 The study found just one default on a PACE loan out of 1,870 deals nationwide since 2008.2

PACE is an innovative program that enables property owners to obtain low-cost, long-term loans for energy efficiency, renewable energy, and water conservation improvements. Projects financed using PACE can generate positive cash flow upon completion with no up-front, out-of-pocket cost to property owners—eliminating the financial barriers that typically prevent investment in revitalizing aging properties. The term of a PACE Financing may extend up to the useful life of the improvement, which may be as high as 20 years or more, and can result in cost savings that exceed the amount of the PACE financing. The result is improved business profitability, an increase in property value, and enhanced sustainability. PACE financing is also available for new construction under Wisconsin law.

Along with the Wisconsin Counties Association, Slipstream and other partners, von Briesen had a leadership role in creating PACE Wisconsin, a joint powers commission comprising a consortium of Wisconsin counties. von Briesen’s vision of a uniform PACE program throughout the state was implemented through creation of a joint powers commission open to any county that wishes to join. PACE is now available in 43 Wisconsin counties, representing 85% of the state’s population.

The recent PACE study also showed that most jurisdictions adopting PACE programs are using a model similar to the one adopted in Wisconsin, because it is easy for local governments to administer.3 Midwestern states are leading the way in expanding PACE. Wisconsin now ranks 11th in PACE financing deals completed, according to PACENation data through 2017.4 In 2019 PACE Wisconsin closed an $8.8 million deal on a historic hotel renovation in Green Bay, financed with a taxable bond offering by the Public Finance Authority. PACE Wisconsin has $15 million in total closings so far in 2019, and over $10 million in the pipeline for the rest of the year.

PACE Wisconsin has registered more than 80 contracting firms that are ready to make buildings more efficient and more comfortable, and has 17 capital providers available to finance building upgrades and new construction. PACE Wisconsin is also supporting legislation to improve the program by reducing paperwork requirements and making financing available for electric vehicle charging equipment. More information about PACE Wisconsin can be found on its website, www.pacewi.org.

1 PACE Market Data, PACENation website, https://pacenation.us/pace-market-data/(accessed August 4, 2019)
2 Commercial PACE Financing and the Special Assessment Process: Understanding Roles and Managing Risks for Local Governments, Greg Leventis and Lisa Schwartz, Lawrence Berkeley National Laboratory, June 2019, http://eta-publications.lbl.gov/sites/default/files/final_cpace_brief_1_ 112308-74205-eere-c-pace-report-arevalo-fz.pdf (accessed August 4, 2019).
3 Commercial PACE Financing and the Special Assessment Process: Understanding Roles and Managing Risks for Local Governments, Greg Leventis and Lisa Schwartz, Lawrence Berkeley National Laboratory, June 2019, http://eta-publications.lbl.gov/sites/default/files/final_cpace_brief_1 _112308-74205-eere-c-pace-report-arevalo-fz.pdf (accessed August 4, 2019).
4 Study: Nonpayment risk remote for commercial clean energy loans, Frank Jossi, Midwest Energy News, July 31, 2019, https://energynews.us/2019/07/31/national/study-nonpayment-risk-remote-for-commercial-clean-energy-loans/ (accessed August 4, 2019) (citing PACE Market Data, PACENation website, https://pacenation.us/pace-market-data/ (accessed August 4, 2019)).

©2019 von Briesen & Roper, s.c

Federal Judge Limits the Reach of the WOTUS Rule

Introduction

During the Obama Administration, the Environmental Protection Agency (“EPA”) and the United States Army Corps of Engineers (collectively, “the Agencies”) adopted a rule amending the regulatory definition of “waters of the United States” (the “WOTUS Rule” or “Rule”).  As explained in a previous alert, the WOTUS Rule has far-reaching implications for project development and landowners across the energy, water, agricultural, construction, and transportation sectors, and it has been the subject of extensive litigation, as well as rulemaking by the Trump Administration.

On Wednesday, August 21, 2019, the United States District Court for the Southern District of Georgia ruled in Georgia v. Wheeler that the WOTUS Rule impermissibly extended the Agencies’ authority beyond the scope of the Clean Water Act (“CWA”) and failed to comply with the Administrative Procedure Act (“APA”). The Court remanded the WOTUS Rule back to the Agencies and extended its preliminary injunction of the Rule.

Background

Since its enactment, the WOTUS Rule has been the subject of many legal challenges, and it was enjoined in numerous states. Additionally, under the Trump Administration, the Agencies proposed a new rule that would have delayed the effectiveness date of the WOTUS Rule for two years (the “Suspension Rule”). As previously discussed, the Suspension Rule was the subject of a nationwide injunction in South Caroline Coastal Conservation League v. Pruitt.  A federal judge in the Western District of Washington then vacated the Suspension Rule in Puget Soundkeeper Alliance v. Wheeler.

After the vacatur of the Suspension Rule, the WOTUS Rule continued to provide fodder for litigation. To date, the WOTUS rule is enjoined in 27 states: Alaska, Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, South Carolina, Oregon, South Dakota, Texas, Utah, West Virginia, Wyoming, and Wisconsin.  The Rule remains effective in 22 other states and the District of Columbia.

The Opinion

In Georgia v. Wheeler, the Court—relying primarily on Justice Kennedy’s concurrence in Rapanos v. United States—held that the WOTUS Rule impermissibly extended the Agencies’ jurisdiction beyond their delegated authority under the CWA.

The Court also held that the Agencies’ definitions of interstate waters, tributaries, adjacent waters, and case-by-case waters violated the CWA, and that the Rule significantly interfered with lands and waters that were traditionally under state authority without clear congressional intent.

Additionally, the Court determined that the Rule failed to comply with the APA both procedurally and substantively. These topics are further discussed below.

Definition of Interstate Waters

The Court found that the definition of interstate waters, which considers all interstate waters to be a “water of the United States” irrespective of navigability, disregarded the Supreme Court’s ruling in Rapanos. In particular, the Court found that WOTUS reads the term “navigability” out of the CWA. As such, under the WOTUS Rule, a non-navigable interstate water with no significant nexus to a “water of the United States” would still be regulated. According to the Court, that result extends beyond the Agencies’ authority under the CWA.

Definition of Tributaries

The Court also concluded that the Rule’s definition of “tributaries” was over-inclusive because it used the presence of an ordinary high water mark (“OHWM”) and bed and banks as physical indicators of volume sufficient to create a regulated “tributary.”  The Court took particular issue with provisions in the WOTUS Rule discussing situations in which these physical indicators are “absent in the field,” but are nevertheless determined to be present by “other appropriate means,” such as “lake and stream gage data, elevation data, spillway height, historic water flow records, flood predictions, statistical evidence, the use of reference conditions, or through . . . remote sensing and desktop tools.”  The Court found this approach inconsistent with Justice Kennedy’s concurrence, noting that “the physical indicators that the Agencies assert provide evidence of sufficient volume and flow to adhere to Justice Kennedy’s significant-nexus test need not actually be physically present in a geographic area so long as computer programs can decipher that they exist and need not presently exist so long as those programs can conclude that they have existed at sometime in the past.”

The Court was also troubled by the application of the “tributaries” definition in the Arid West, citing evidence that the physical indicators of a tributary often appear around water bodies in the Arid West, even when they are wholly isolated from navigable waters. The Court found that the definition of tributaries could inadvertently regulate dry areas that may contain attributes of an OWHM and a bed and bank due to an extreme weather event—a result that Justice Kennedy’s concurrence in Rapanos sought to avoid. Accordingly, Court concluded that the “tributaries” definition extended too far.

Definition of Adjacent Waters

According to the Court, the definition of “adjacent waters” clearly conflicted with Justice Kennedy’s opinion in Rapanos by erroneously including waters adjacent to non-navigable tributaries. The Court recognized that, while adjacency is a permissible factor to consider when determining jurisdiction under the CWA, that factor must still be subject to Kennedy’s significant-nexus test.  The Court reasoned that the definition impermissibly extended jurisdiction over isolated and inconsequential waters.

Case-by-Case Waters

The Court presumed that the case-by-case category was the Agencies’ attempt to implement Justice Kennedy’s significant-nexus test. Because the Agencies relied on impermissible definitions of “interstate waters” and “tributaries” in formulating their criteria for the case-by-case category of waters, the criteria were also invalid to the extent they were the logical outgrowth of these definitions. Because the definitions of “interstate waters” and “tributaries” were already overbroad, the Agencies could not base case-by-case category waters of those definitions, as they too would impermissibly expand federal jurisdiction. Notably, the Court concluded that the Agencies’ reliance on erroneous definitions of “tributaries” and “interstate waters” was the only error in the WOTUS Rule’s case-by-case category under the CWA.

The WOTUS Rule Substantially Interferes with Traditional State Power

The Court also found that the Rule substantially encroached on traditional state power. Recognizing that the CWA permits the federal government to regulate waters in order to protect the biological and physical integrity of the Nation’s waters, the Court also emphasized the Congressional policy in the CWA stating that states should retain primary responsibility over land and water resources. The Court found that the WOTUS Rule as written would result in the federal government regulating immense stretches of intrastate land not contemplated by that CWA.  To support this finding, the Court cited statements made by the Agencies under the Trump Administration in a recently-proposed rule to rescind the WOTUS Rule that the WOTUS Rule “may have altered the balance of authorities between the federal and State governments, contrary to the agencies’ [prior] statements,” and to statistics suggesting the WOTUS rule was estimated to increase the scope of federal jurisdiction over waters by at least two percent — an increase the Court characterized as “a substantial intrusion into lands and waters traditionally left to state authority.” According to the Court, this significant increase in jurisdiction improperly stripped states of their traditional authority to regulate these types of lands and waters.

The Rule failed to comply with APA and was arbitrary and capricious

The Court found that the rule violated the APA in two ways: (1) the final Rule was not the logical outgrowth of the Agencies’ previously-proposed version of the Rule; and, (2) there were parts of the Rule that were arbitrary and capricious. The Rule failed to be the logical outgrowth of the Agencies’ proposed rule for three reasons. First, while the proposed Rule did not include distance limitations when defining “neighboring waters,” the final Rule did. Second, the proposed Rule similarly did not include distance limitations for adjacent waters in the case-by-case categories, while the final Rule did. Lastly, the proposed Rule did not contain any explicit farming exemption, but the final Rule contained a farming exemption for adjacent waters. The Court agreed with Plaintiffs’ argument that, had they known that there was going to be a farming exemption for adjacent waters, they would have also commented that there should be a farming exemption for tributaries.

The Court also determined that portions of the Rule were arbitrary and capricious. The Court found that the Agencies’ inclusion of a farming exemption for adjacent waters but not tributaries was arbitrary and capricious because it failed to treat similar cases in a similar manner without justification. The Court also found that the Agencies’ decision to use FEMA 100-year floodplain maps to define adjacent and case-by-case waters was arbitrary because of the inaccuracies of outdated flood maps, and because the Agencies failed to sufficiently explain why the 100-year floodplain was the proper limit. Lastly, the Agencies’ use of a distance limitation for adjacent waters was arbitrary because the Agencies only gave broad, conclusory reasons why the limit was selected and failed to explain their decision.

Practical Implications

Georgia v. Wheeler represents yet another federal court to examine the merits of the WOTUS Rule and to find it exceeding the Agencies’ statutory authority under the CWA and violating provisions of the APA.  The Court did not vacate the rule, but simply remanded it back to the Agencies, and therefore the Rule remains effective where not enjoined. This case continues the patchwork implementation of the WOTUS Rule, which is now enjoined in 27 states, but is still effective in 22 other states and the District of Columbia.

This patchwork situation may not last long, as appeals will likely be filed challenging the Georgia v. Wheeler decision and other decisions enjoining or declining to enjoin the WOTUS Rule. Additionally, the Agencies under the Trump Administration are expected in the near future to publish a final version of their proposed new WOTUS Rule, which is also very likely to face legal challenges.

As a result on the ongoing litigation and rulemaking processes, the regulated community is unlikely to see true certainty on the question of the geographic scope of the CWA until Congress takes action to clarify its scope or the Supreme Court issues a new substantive decision addressing this issue.

© 2019 Van Ness Feldman LLP

NIEHS-Funded Research Finds that Graphene Shield Shows Promise in Blocking Mosquito Bites

On August 26, 2019, the National Institute of Environmental Health Sciences (NIEHS) announced that the results of an NIEHS-funded study show that graphene could provide alternatives to chemicals in insect repellant and protective clothing.  The study, “Mosquito Bite Prevention through Graphene Barrier Layers,” was published in the Proceedings of the National Academy of Sciences.

According to the abstract, the researchers hypothesized that graphene films may provide mosquito bite protection for light, fiber-based fabrics.  The researchers investigated the fundamental interactions between graphene-based films and the mosquito species Aedes aegypti through a combination of live mosquito experiments, needle penetration force measurements, and mathematical modeling of mechanical puncture phenomena.  The abstract states that “[t]he results show that graphene or graphene oxide nanosheet films in the dry state are highly effective at suppressing mosquito biting behavior on live human skin.  Surprisingly, behavioral assays indicate that the primary mechanism is not mechanical puncture resistance, but rather interference with host chemosensing.”

The researchers propose that the interference is “a molecular barrier effect that prevents Aedes from detecting skin-associated molecular attractants trapped beneath the graphene films and thus prevents the initiation of biting behavior.”  According to the abstract, placing water or human sweat on the external film surface circumvents the molecular barrier effect.  In this scenario, the abstract states, “pristine graphene films continue to protect through puncture resistance — a mechanical barrier effect — while graphene oxide films absorb the water and convert to mechanically soft hydrogels that become nonprotective.”

©2019 Bergeson & Campbell, P.C.
This article was written by Lynn L. Bergeson and Carla N. Hutton of Bergeson & Campbell, P.C.
For more environmental research, see the National Law Review Environmental, Energy & Resources law page.

Zero Waste Act Introduced By U.S. Representative Omar

On July 25, 2019, U.S. Representative Ilhan Omar (D-MN) introduced the Zero Waste Act, which intends to create a federal grant program to invest in solutions that address waste. The bill, if passed, will go towards recycling infrastructure or the creation of partnerships with local businesses focused on waste reduction. Representative Omar believes the bill will not only create jobs, but also reduce greenhouse gas (GHG) emissions, grow domestic manufacturing, clean waterways, save energy, ensure safety from health hazards, and grow the U.S. economy.
Omar’s bill has been endorsed by several organizations, including the City of Minneapolis, Eureka Recycling, Climate Generation, and Surfrider Foundation, among others. Presenting this bill through the lens that waste is an environmental justice issue, Representative Omar stated that “[a]ddressing the waste crisis is critical to preventing further damage to our climate—it is integral to racial justice and a clean, equitable future.” At a time where climate change debates have been of high interest to the U.S. population, in particular as the presidential candidate debates continue, it will be interesting to see whether this bill is passed. The full text of the bill can be accessed here.
©2019 Bergeson & Campbell, P.C.
For more environmental legislation see the Environmental, Energy & Resources page on the National Law Review.

Asbestos Receiving Renewed Attention in Light of Additional US EPA Assessments under TSCA and Potential Ban by Congress

Asbestos is in the hot seat these days and is receiving significant attention from both US EPA and Congress.  In particular, US EPA continues to evaluate asbestos risks under the Toxic Substances Control Act (TSCA) and has imposed additional regulations, while Congress is currently considering an outright ban on the substance.

On April 25, 2019, US EPA issued a final Significant New Use Rule (SNUR) under Section 5 of TSCA to prevent certain discontinued uses of asbestos from re-entering the marketplace without a review by EPA.  The rule essentially restricts manufacturing, importing or processing of asbestos for certain target uses that are neither ongoing, nor already prohibited under TSCA.

The SNUR covers a number of target uses for which US EPA “has found no information” indicating that they are ongoing: adhesives, sealants, and roof and non-roof coatings; arc chutes; beater-add gaskets; cement products; extruded sealant tape and other tape; filler for acetylene cylinders; certain friction materials; high-grade electrical paper; millboard; missile liner; packings; pipeline wrap; reinforced plastics; roofing felt; separators in fuel cells and batteries; vinyl-asbestos floor tile; woven products; any other building material; and “any other use of asbestos that is neither ongoing nor already prohibited under TSCA.”  While the SNUR does not actually prohibit these uses, none of the uses may return to the marketplace without EPA review of their potential risks to health and the environment.   A party must submit a “significant new use notice” to US EPA at least 90 days prior to commencing manufacturing, importing or processing of asbestos for such uses.

While the Rule effectively expands the number of restricted uses, the SNUR has raised concerns as it essentially removes the uses from US EPA’s pending TSCA risk evaluation of asbestos, which is being performed pursuant to EPA’s December 2016 listing of substances under Section 6(b) of TSCA for which a final risk assessment is due in December 2019.

Meanwhile, Congress is considering a ban on all uses of asbestos (which is already banned in more than 60 countries).  Most recently on May 8, 2019, the House Energy and Commerce Committee’s environmental panel held a hearing on H.R. 1603 (the “Alan Reinstein Ban Asbestos Now Act of 2019” introduced on March 7, 2019).  The Bill seeks to amend TSCA to require US EPA to ban importation and use of asbestos in the US within one year of enactment, broaden EPA’s definition of asbestos to include additional fiber types, and also require that EPA and the Departments of Health and Human Services and Labor assess and report to Congress regarding existing “legacy” asbestos in residential, commercial, industrial, public, and school buildings to determine quantity and risk.

Although there is reportedly openness to a bipartisan compromise on the Democratic-sponsored bill, concerns have been raised as to its application, including the effect upon the chlorine industry and that it may hamper the industry’s ability to manufacture chlorine for public water supply use and healthcare facility sanitization.  For instance, on May 8, 2019, the American Water Works Association submitted comments to the Committee noting that “more than forty percent of the chlorine supply in the United States is dependent on production methods that rely on asbestos.” Further, the relatively short 12-month transition period has been cited as another concern, as well as the associated costs.

While US EPA’s TSCA risk evaluation remains ongoing through the end of 2019 (and possibly beyond) and Congress considers the ban proposed in H.R. 1603 in committee and markup, asbestos will continue to received increased attention.  Industries that deal with asbestos-containing materials would be advised to consult with technical and legal experts to consider the implications of these measures, as well as look for additional opportunities to advocate its position to decision makers as these measures are considered and finalized.

 

© Copyright 2019 Squire Patton Boggs (US) LLP
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