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Supreme Court Says Case Over ADA ‘Tester’ Standing Is Moot, But Issue is Still Alive

On December 5, 2023, the Supreme Court of the United States vacated a case over whether a self-proclaimed “tester” had standing to bring Americans with Disabilities Act (ADA) claims against a hotel that she did not plan to visit, finding the case was moot without addressing the highly-anticipated standing issue.

Quick Hits

The Supreme Court vacated an ADA case against a hotel by a plaintiff who did not intend to stay at the hotel as moot despite the hopes of the business community that it would reduce the overwhelming number of ADA lawsuits.
The decision did not address whether such a ‘tester’ plaintiff has standing under the ADA except to say the issue is still alive and without providing any indication for how the Supreme Court or any other court will resolve the tester standing issue going forward.
A concurring opinion by Justice Thomas suggested that the plaintiff lacked standing because the only injury she suffered was so-called “informational injury” that is not protected by the ADA.
The Supreme Court vacated Acheson Hotels v. Laufer as moot but said the circuit split over whether “testers” have standing “is very much alive.” The high court further vacated the First Circuit Court of Appeals ruling that the plaintiff, Deborah Laufer, who uses a wheelchair, did have standing to bring ADA claims.

Still, the ruling failed to answer key questions about whether testers, individuals who seek out potential claims for discrimination violations against businesses, have standing to bring such claims amid a legal strategy to barrage businesses with tester lawsuits that often allege mere technical rights violations with a goal of extracting settlement payouts.

Despite once providing hope that the Supreme Court saw the Laufer case as a vehicle for reducing the overwhelming number of ADA lawsuits, including website accessibility lawsuits, when it accepted the case in March 2023, the dismissal of the case as moot does not offer relief for the business community and provides virtually no indication for how this Court (or any other court) will resolve the tester standing issue going forward.

Laufer, a self-proclaimed tester plaintiff who combed through various hotel websites searching for potential ADA violations, alleged that the website for The Coast Village Inn and Cottages in Maine, which was formerly owned by Acheson Hotels, LLC, did not provide sufficient information about its accessible accommodations in violation of Title III of the ADA and relevant U.S. Department of Justice regulations.

After the case was accepted by the Supreme Court, Laufer voluntarily dismissed her suit and asked the court to dismiss the case as moot. During oral arguments in October 2023, the justices questioned whether Laufer dropping her suit in addition to the facts that Acheson Hotels had already sold the hotel in question and the hotel’s current website is currently compliant with Title III, did not render the case moot.

But Acheson Hotels argued that the high court should decide the important standing questions while the issue was briefed and before the court as another appropriate case might not reach the high court anytime soon.

In the high court’s decision, Justice Amy Coney Barrett, stated that while the Court was “sensitive to Acheson’s concern about litigants manipulating the jurisdiction of” the Supreme Court, they were “not convinced … that Laufer abandoned her case in an effort to evade” the Court’s review. Still, Justice Barrett noted that the Court “may exercise [its] discretion differently in a future case.”

Justice Clarence Thomas stated in a separate concurring opinion that he would not dismiss the case as moot and would find that Laufer lacks standing to bring ADA claims. Justice Thomas argued that Laufer did not allege a violation of her rights under the ADA because “the ADA prohibits only discrimination based on disability—it does not create a right to information.

Justice Thomas distinguished Laufer’s claim from that in the 1968 Supreme Court case in Havens Realty Corp. v. Coleman, in which the high court held, in addressing the Fair Housing Act, that a “dignitary harm” a tester may experience from witnessing discrimination is an adequate harm to establish standing.

Justice Thomas argued that in Havens Realty, “a black tester” who was told there were no apartments available when a “white tester” was told there were “vacancies,” had standing because he had been “personally denied that truthful information.” The situation in that case “thus has no bearing on Laufer’s standing as a tester of compliance with the ADA, which provides no such statutory right to information,” Justice Thomas stated.

Next Steps

With the Supreme Court declining to address tester standing, the issue and broad circuit split remains open. At this time, it is unclear when the high court will have another opportunity to address it, and, if it does, if the plaintiff will effectively moot the case again by abandoning the claim that made its way to the Court. Additionally, while Justice Thomas’s concurrence suggested that Laufer did not have standing based on the facts of her case, the opinion did not reject “dignitary harm” as a basis for standing under Havens Realty.

EU to Ban Carbon Offset Claims Entirely?

Responding to pressure from activists who have argued that “[c]arbon neutral claims are greenwashing, plain and simple,” the European Parliament and Council have reached a provisional agreement to ban all carbon-neutral claims in member states. If the Parliament approves the deal, member states will have 24 months to enact legislation to implement it. So, a new set of laws could become effective in 2026. Corporations will have some lead time to come into compliance.

The EU provisional agreement, if made final, will be the latest blow to carbon neutrality claims and is particularly unfortunate in not distinguishing between credible and non-credible offsets. This could also hurt voluntary carbon markets, which have been jarred by the recent demise of the giant, offset-producing African Kariba Project.

Commentators have also speculated that the EU Parliament and Council action is an effort to “put a thumb on the scales” of the FTC Green Guides revision process, currently underway in the United States. If the FTC were to follow suit, carbon reforestation projects worldwide could be jeopardized. Of course, the FTC is bound by the First Amendment and would be reluctant to “ban” a statement. However, it could erect onerous substantiation and disclosure requirements that render such claims much more difficult to make.

The ill-fated Kariba Project has become an unfortunate bellwether for carbon neutrality claims based on credits generated from reforestation or forest preservation. The episode may say more about financial speculation in carbon markets than it does about the science of reforestation. Replanting trees is a surefire way to sequester carbon – at least for a while – and financial incentives to do so should be encouraged, not discouraged.

These realities aside, the clear upshot is that carbon neutrality claims are increasingly under attack by activists who seemingly lump all carbon offsets together as “harmful” – whether generated by reforestation, carbon capture, or voluntary carbon reduction. That’s too bad, as any credible financial incentive to remove carbon from the atmosphere should be encouraged, if not financially incentivized. The role of independent certifiers is to ensure that the carbon offsets are real and not overstated. A flat ban seems counterproductive to environmental protection and greenhouse gas reduction.

The sad reality is that many companies will begin to migrate away from reliance on carbon offsetting. It is simply becoming too risky. Meanwhile, voluntary carbon trading markets will suffer greatly, and a crucial green development mechanism will be lost.

The sad reality is that many companies will begin to migrate away from reliance on carbon offsetting. It is simply becoming too risky.

United States | Winter Travel Reminders

With the winter holidays approaching, many foreign national employees are planning to visit family abroad, vacation overseas and perhaps renew their visas while out of the country. Here are a few key reminders as we approach the holiday travel season:

Travelers should be sure to check their passports and visas. Travelers are encouraged to check how much time they must have on their passport to travel to their destination country — a minimum of six months’ validity is required for many countries, including the United States in some cases. Travelers who require a visa to reenter the U.S. should make sure their visa is valid for reentry.

Some consulates remain delayed. Some travelers may be planning to renew visas while abroad. Visa processing has improved substantially since last year, but wait times for business and tourist visas continue to be significant at some consular posts, such as Colombia, India and Mexico. Travelers should consult the appropriate embassy or consulate website for the most up-to-date information regarding appointment availability and requirements for expedited requests.

Administrative processing can delay visa issuance. BAL has seen an improvement in the number of visa applications flagged for additional administrative processing. However, some applications may still require further administrative processing, which typically delays visa applications. Travelers should note that even if a visa renewal is approved at the time of an interview, it may take a few weeks to receive the visa foil. Employers with employees who have an administrative processing case and a particularly urgent need to be in the country should contact BAL.

Travelers should consult entry restrictions for destination countries. While most countries have lifted COVID-19 entry rules, some continue to enforce vaccination and testing requirements. Employees should be aware of their destination country’s requirements and procedures and factor additional time into their travel plans if necessary.

Travelers should review State Department travel advisories. Individuals are encouraged to visit the State Department’s travel advisory website ahead of departure for detailed information about potential travel concerns at their destination.

BAL Analysis: Foreign nationals planning to travel this holiday season should be sure to check their passport and visa validity before leaving the U.S. Those planning to renew visas while abroad should anticipate possible delays; while wait times have improved, some consulates remain backlogged and administrative processing can cause additional delays. Travelers are also urged to review their destination country’s entry requirements and may wish to consult State Department travel warnings.

Algorithmic Pricing Agents and Price-Fixing Facilitators: Antitrust Law’s Latest Conundrum

Are machines doing the collaborating that competitors may not?

It is an application of artificial intelligence (“AI”) that many businesses, agencies, legislators, lawyers, and antitrust law enforcers around the world are only beginning to confront. It is also among the top concerns of in-house counsel across industries. Competitors are increasingly setting prices through the use of communal, AI-enhanced algorithms that analyze data that are private, public, or a mix of both.

Allegations in private and public litigation describe “algorithmic price fixing” in which the antitrust violation occurs when competitors feed and access the same database platform and use the same analytical tools. Then, as some allege, the violations continue when competitors agree to the prices produced by the algorithms. Right now, renters and prosecutors are teeing off on the poster child for algorithmic pricing, RealPage Inc., and the many landlords and property managers who use it.

PRIVATE AND PUBLIC LITIGATION

A Nov. 1, 2023 complaint filed by the Washington, DC, Attorney General’s office described RealPage’s offerings this way: “[A] variety of technology-based services to real estate owners and property managers including revenue management products that employ statistical models that use data—including non-public, competitively sensitive data—to estimate supply and demand for multifamily housing that is specific to particular geographic areas and unit types, and then generate a ‘price’ to charge for renting those units that maximizes the landlord’s revenue.”

The complaint alleges that more than 30% of apartments in multifamily buildings and 60% of units in large multifamily buildings nationwide are priced using the RealPage software. In the Washington-Arlington-Alexandria Metropolitan Area that number leaps to more than 90% of units in large buildings. The complaint alleges that landlords have agreed to set their rates using RealPage.

Private actions against RealPage have also been filed in federal courts across the country and have been centralized in multi-district litigation in the Middle District of Tennessee (In re: RealPage, Inc., Rental Software Antitrust Litigation [NO. II], Case No. 3:23-md-3071, MDL No. 3071). The Antitrust Division of the Department of Justice filed a Statement of Interest and a Memorandum in Support in the case urging the court to deny the defendants’ motion to dismiss.

Even before the MDL, RealPage had attracted the Antitrust Division’s attention when the company acquired its largest competitor, Lease Rent Options for $300 million, Axiometrics for $75 million, and On-Site Manager, Inc. for $250 million.

The Antitrust Division has been pursuing the use of algorithms in other industries, including airlines and online retailers. The DOJ and FTC are both studying the issue and reaching out to experts to learn more.

JOURNALISTS AND SENATORS

Additionally, three senators urged DOJ to investigate RealPage after reporters at ProPublica wrote an investigative report in October 2022. The journalists claim that RealPage’s price-setting software “uses nearby competitors’ nonpublic rent data to feed an algorithm that suggests what landlords should charge for available apartments each day.” ProPublica speculated that the algorithm is enabling landlords to coordinate prices and in the process push rents above competitive levels in violation of the antitrust laws.

Senators Amy Klobuchar (D-MN), Dick Durban (D-IL) and Cory Booker (D-NJ) wrote to the DOJ concerned that the RealPage enables “a cartel to artificially inflate rental rates in multifamily residential buildings.”

Sen. Sherrod Brown (D-OH) also wrote to the Federal Trade Commission with concerns “about collusion in the rental market,” urging the FTC to “review whether rent setting algorithms that analyze rent prices through the use of competitors’ private data … violate antitrust laws.” The Ohio senator specifically mentioned RealPage’s YieldStar and AI Revenue Management programs.

THE EUROPEANS

The European Commission has enacted the Artificial Intelligence Act, which includes provisions on algorithmic pricing, requiring algorithmic pricing systems be transparent, explainable, and non-discriminatory with regard to consumers. Companies that use algorithmic pricing systems will be required to implement compliance procedures, including audits, data governance, and human oversight.

THE LEGAL CONUNDRUM

An essential element of any claimed case of price-fixing under the U.S. antitrust laws is the element of agreement: a plaintiff alleging price-fixing must prove the existence of an agreement between two or more competitors who should be setting their prices independently but aren’t. Consumer harm from collusion occurs when competitors set prices to achieve their maximum joint profit instead of setting prices to maximize individual profits. To condemn algorithmic pricing as collusion, therefore, requires proof of agreement.

It may be difficult for the RealPage plaintiffs to prove that the RealPage’s users agreed among themselves to adhere to any particular price or pricing formula, but not impossible. End users are likely to argue that RealPage’s pricing recommendations are merely aggregate market signals that RealPage is collecting and disseminating. The use of the same information service, their argument will go, does not prove the existence of an agreement for purposes of Section 1 of the Sherman Act.

The parties and courts embroiled in the RealPage litigation are constrained to live under the law as it presently exists, so the solution proposed by Michal Gal, Professor and Director of the Forum on Law and Markets at the University of Haifa, is out of reach. In her 2018 paper, “Algorithms as Illegal Agreements,” Professor Gal confronts the agreement problem when algorithms set prices and concludes that it is time to “rethink our laws and focus on reducing harms to social welfare rather than on what constitutes an agreement.” Academics have been critical of the agreement element of Section 1 for years, but it is unlikely to change anytime soon, even with the added inconvenience it poses where competitors rely on a common vendor of machine-generated pricing recommendations.

Nonetheless, there is some evidence that autonomous machines, just like humans, can learn that collusion allows sellers to charge monopoly prices. In their December 2019 paper, “Artificial Intelligence, Algorithmic Pricing and Collusion,” Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolo, and Sergio Pastorello at the Department of Economics at the University of Bologna showed with computer simulations that machines autonomously analyzing prices can develop collusive strategies “from scratch, engaging in active experimentation and adapting to changing environments.” The authors say indications from their models “suggest that algorithmic collusion is more than a remote theoretical possibility.” They find that “relatively simple [machine learning] pricing algorithms systematically learn to play collusive strategies.” The authors claim to be the first to “clearly document the emergence of collusive strategies among autonomous pricing agents.”

THE AGREEMENT ELEMENT IN THE MACHINE PRICING CASE

For three main reasons, the element of agreement need not be an obstacle to successfully prosecuting a price-fixing claim against competitors that use a common or similar vendor of algorithmic pricing data and software.

First, there is significant precedent for inferring the existence of an agreement among parties that knowingly participate in a collusive arrangement even if they do not directly interact, sometimes imprecisely referred to as a “rimless wheel hub-and-spoke” conspiracy. For example, in Toys “R” Us, Inc. v. F.T.C., 221 F.3d 928 (9^th Cir. 2000), the court inferred the necessary concerted action from a series of individual agreements between toy manufacturers and Toys “R” Us in which the manufacturers promised not to sell the toys sold to Toys “R” Us and other toy stores to big box stores in the same packaging. The FTC found that each of the manufacturers entered into the restraint on the condition that the others also did so. The court found that Toys “R” Us had engineered a horizontal boycott against a competitor in violation of Section 1, despite the absence of evidence of any “privity” between the boycotting manufacturers.

The Toys “R” Us case relied on the Supreme Court’s decision in Interstate Circuit v. United States, 306 U.S. 208 (1939), in which movie theater chains sent an identical letter to eight movie studios asking them to restrict secondary runs of certain films. The letter disclosed that each of the eight were receiving the same letter. The Court held that a direct agreement was not a prerequisite for an unlawful conspiracy. “It was enough that, knowing that concerted action was contemplated and invited, the distributors gave their adherence to the scheme and participated in it.”

The analogous issue in the algorithmic pricing scenario is whether the vendor’s end users that their competitors are also end users. If so, the inquiry can consider the agreement element satisfied if the algorithm does, in fact, jointly maximize the end users’ profits.

The second factor overcoming the agreement element is related to the first. Whether software that recommends prices has interacted with the prices set by competitors to achieve joint profit maximization—that is, whether the machines have learned to collude without human intervention—is an empirical question. The same techniques used to uncover machine-learned collusion by simulation can be used to determine the extent of interdependence in historical price setting. If statistical evidence of collusive pricing is available, it is enough that the end users knowingly accepted the offer to set its prices guided by the algorithm. The economics underlying the agreement element in the first place lies in prohibition of joint rather than individual profit maximization, so direct evidence that market participants are jointly profit maximizing should obviate the need for further evidence of agreement.

A third reason the agreement element need not stymie a Section 1 action against defendants engaged in algorithmic pricing is based on the Supreme Court’s decision in American Needle v. NFL, 560 U.S. 183 (2010). In that case the Court made clear that arrangements that remove independent centers of decision-making from the market run afoul of Section 1, if the net effect of the algorithm is to displace individual decision-making with decisions outsourced to a centralized pricing agent, the mechanism should be immaterial.

The rimless wheel of the so-called hub-and-spoke conspiracy is an inadequate analogy because the wheel in these cases does have a rim, i.e., a connection between the conspirators. In the scenarios above in which the courts have found Section 1 liability i) each of the participants knew that its rivals were also entering into the same or similar arrangements, ii) the participants devolved pricing authority away from themselves down to an algorithmic pricing agent, and iii) historical prices could be shown statistically to have exceeded the competitive level in a way consistent with collusive pricing. These elements connect the participants in the scheme, supplying the “rim” to the spokes of the wheel. If the plaintiffs in the RealPage litigation can establish these elements, they will have met their burden of establishing the requisite element of agreement in their Section 1 claim.

Beneficial for Whom? Requirement to Provide Beneficial Ownership Information for Business Entities Begins January 1, 2024

On January 1, 2024, the Corporate Transparency Act, a US federal law, will begin requiring certain corporations and limited liability companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury. The corporate ownership structures of many gaming companies, particularly those that utilize a private equity or Voteco model, may be subject to the reporting obligations.

Unless an exemption applies, entities subject to these obligations must report information about their beneficial owners, including their full legal names, dates of birth, addresses, unique identification numbers, and an image of one of the following non-expired documents: (i) state driver’s license; (ii) US passport; or (iii) identification document issued by a state, local government, or tribe. Gaming companies should consult with their legal counsel on their specific structures and the applicability of the reporting obligations to their corporate ownership models.

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information, may result in civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required beneficial ownership information report may be held accountable for that failure.

The obligation to report this information is generally required for entities with at least one beneficial owner who owns 25% or more of the entity or exercises substantial control over it. An individual exercises substantial control over a reporting company if that individual meets any of four general criteria: (1) the individual is a senior officer; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision maker; or (4) the individual has any other form of substantial control over the reporting company.

Reporting companies created or registered to do business before January 1, 2024, will have until January 1, 2025, to file their initial reports. Under FinCEN’s regulations, reporting companies created or registered on or after January 1, 2024, will have 90 days after their company’s creation or registration to file their initial reports, and those created or registered on or after January 1, 2025, will have 30 days after their company’s creation or registration to file their initial reports.

EPA Proposes Updates Intended to Strengthen the Safer Choice Standard

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

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

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

Entering or Exiting a Product Class (Section 3.4)

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

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

On-Site Audit (Section 3.6.2)

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

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

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

Primary Packaging (Section 4.2.5)

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

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

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

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

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

Yellow Triangle Content Limit (Section 4.2.8)

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

Ingredient Combinations Causing Adverse Effects (Section 4.5)

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

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

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

Special Product Classes (Section 4.7)

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

Products Intended for Use on Pets (Section 4.7.5)

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

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

Direct Release Products (Section 4.8.1)

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

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

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

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

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

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

Surfactants (Section 5.3)

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

Disposable Wipes (Section 5.11)

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

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

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

Odor Elimination Chemicals (Section 5.17)

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

SCIL (Section 5.18)

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

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

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

Safer Choice Cleaning Service Certification (Section 7)

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

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

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

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

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

Commentary

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

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

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

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

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

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

Employment Tip of the Month – December 2023

Q: What obligations do employers have when considering employee requests for time off for religious observances, especially during the holidays?

A: While employers generally are free to approve or refuse employee requests for time off, when it comes to requests for time off for religious observance, they are required by law to provide reasonable accommodations to employees for religious observances that conflict with work requirements at any point during the year, including holidays when there is an increase in such requests, unless doing so would create an undue hardship.

Title VII of the Civil Rights Act of 1964 (Title VII), applicable to employers with 15 or more employees, and similar state laws prohibit employers from discriminating against employees in hiring, firing, and other terms and conditions of employment because of their religious beliefs.

“Religious belief” is interpreted broadly by the Equal Employment Opportunity Commission (EEOC) and the courts to include not only traditional organized religions, such as Buddhism, Christianity, Hinduism, Islamism and Judaism, but also nontraditional religions and ethical and moral beliefs if they are sincerely held. Title VII also requires employers to reasonably accommodate the religious beliefs of employees unless doing so would impose an undue hardship on the employer. Reasonable accommodations can take many forms, from a work schedule modification or shift change to time off, leaving the question: What’s an undue hardship?

Until recently, the threshold to prove undue hardship was defined as “more than a de minimus” expense. Earlier this year, in Groff v. DeJoy, 600 U.S. 447 (2023), the Supreme Court of the United States did away with the “de minimus” threshold and clarified that to establish the undue hardship defense, under which the employer must show that granting the accommodation would result in a substantial burden to the employer, taking into account the particular accommodation at issue and its practical impact on the business. Under Groff, an employer must conduct an individualized assessment of a religious accommodation request and may deny it only if granting the accommodation would result in substantial increased costs in relation to the employer’s business operations.

While permitting work schedule modifications or time off to accommodate religious observances during the holidays can present administrative headaches, such accommodations often have little or no cost – save for the rare occasion when it may be necessary to hire and train a substitute employee. As a best practice, employers should permit employees to modify their work schedules or take time off for religious observation during the holidays.

The Limits of Deference to Agency Interpretations Under Maine Law

Earlier this month, the Maine Law Court issued its decision in Cassidy Holdings, LLC v. Aroostook County Commissioners, holding that, in a municipality without a board of assessment review, a taxpayer whose nonresidential property is valued at $1 million or more has the option to appeal an assessment either to the county commissioners or to the State Board of Property Tax Review. The decision has been described by my excellent colleagues, Jon Block and Olga Goldberg. For purposes of this blog, it is noteworthy that that Cassidy Holdings took up an issue of broad application: the extent of deference owed to changing agency interpretations of a state law.

In Cassidy Holdings, the county commissioners cited a Tax Bulletin issued by Maine Revenue Services as support for their statutory interpretation argument. The interpretive guidance provided by the Maine Revenue Services, however, had changed over time. Initially, the agency had taken the position that appeals could go either to the county commissioners or the state board; later, without explanation, the agency changed its guidance to state that appeals should be taken to the state board. This change raised the question whether the agency’s statutory interpretation should be granted judicial deference.

The Law Court did not have to resolve this issue, because it reached its conclusion based on the plain and unambiguous meaning of the statutory language. Nevertheless, the Court found this issue to be of sufficient importance to address in a lengthy footnote. While acknowledging that an “agency is free to change its mind in its interpretation of a statute,” Justice Connors, writing for the Court, made clear that Maine courts should not give deference to an agency interpretation when the agency has taken a new position without reasoned explanation. For deference to be owed,

the agency must acknowledge that it is making a change, explain why, and give due consideration to the serious reliance interests on the old policy.

The Court cited numerous federal authorities in support of its conclusion that an agency must explain its change in position.

This footnote is notable on several levels. First, although this issue had been addressed by federal courts, the Law Court had not previously opined on this particular limitation to Chevron-style judicial deference to agency interpretations of state law. This limitation promises to have application in a wide variety of cases. Second, the Law Court’s articulation of this limitation on Chevron-style deference is a reminder of the unusual standing of that doctrine under Maine law. As previously discussed on this blog, the Law Court has never addressed how the federal Chevron doctrine of judicial deference to agency interpretations of state law relates to Maine’s strict separation of powers doctrine. That issue promises to come into stark relief early next year, when the Supreme Court will consider a pair of cases challenging the Chevron doctrine. Given the Law Court’s recent emphasis on the primacy doctrine, together with any potential changes to the Chevron doctrine at the federal level, the Court may well confront additional issues relating to the application of Chevron deference in the near future.

Be Prepared for Significant Employment Law Changes in 2024

The year 2023 brought many changes to Illinois labor and employment law. As the year ends, it is important to make sure you are ready for the laws that go into effect January 1, 2024. Taking the time to review your policies and procedures before the start of the New Year mitigates the chance of a surprise violation. When updating your policies and procedures for your business, consider the following:

The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance will require covered employers to provide minimum paid leave for employees in Chicago;
The Paid Leave for All Workers Act implements minimum paid leave for workers in Illinois;
The Illinois Transportation Benefits Program Act will mandate certain pre-tax commuter benefits;
Amendments to the Equal Pay Act of 2003 with HB 4604 and HB 3129 will require covered employers to submit a filing with the Illinois Department of Labor;
Amendment to the Day and Temporary Labor Services Act with HB 2862 imposes certain equal pay and benefits requirements on covered temporary laborers; and
The Annual Illinois Minimum Wage Increase will increase the state minimum wage rates.

US Consulate in Tel Aviv Resumes Limited Operations for US Citizens and Nonimmigrant Visa Applicants

This post provides the latest update with respect to consular section operations in Israel. After closures caused by the Oct. 7, 2023, attacks on Israel and subsequent security concerns, the U.S. consular posts in Israel have resumed essential U.S. citizen services and limited nonimmigrant visa services.

The U.S. Citizen Services Unit has established daily walk-in times for U.S. citizens with immediate travel plans to obtain emergency passports. This includes emergency U.S. passport applications for first-time applicants. Furthermore, appointments can be made for all other purposes, including non-emergency travel. Appointments for renewal of lost or expired passports, Consular Reports of Birth Abroad, and notarial services are made available for the following week every Wednesday at 3 p.m. local time. Additionally, the U.S. Embassy in Jerusalem has warned that escalated levels of violence and danger in the West Bank may make it difficult for U.S. citizens to access the U.S. Embassy in Jerusalem and Consular Branch in Tel Aviv, so U.S. Services will be providing regular outreach to the West Bank for affected individuals.

Additionally, limited visa services have resumed and visa appointments can be scheduled for nonimmigrant work visas such as E-1, E-2, L-1, and H-1B; dependent visas; and student visas, such as F-1 and M-1. B visitor visa appointments and immigrant visa services continue to be unavailable. Importantly, Israeli citizens are eligible for visa-free visitor entries to the United States through the Electronic System for Travel Authorization (ESTA) for up to 90 days, subject to ESTA enrollment and approval.

Tag: business

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