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Tag: environmental social governance

Meeting New Challenges: Environmental, Energy, and ESG Issues to Watch in 2024

Meeting New Challenges: Environmental, Energy, and ESG Issues to Watch in 2024

The regulated community faces a complex and evolving landscape. As we head into 2024, our team of energy, environmental, and environmental, social, and governance (ESG) attorneys provide insights and guidance on how to navigate the changing environment.

While these challenges may not be new, their significance continues to grow. We recently released our 2023 “Top 10” lists for Environmental & Energy and ESG, outlining the biggest challenges we encountered last year. Below, we summarize nine issues likely to surface as we head into 2024.

Federal Regulatory Priorities

The Biden Administration’s Fall 2023 regulatory Unified Agenda was released December 6. US Environmental Protection Agency (EPA) Administrator Michael Regan indicated that EPA intends to “aggressively deliver” on President Biden’s “climate and environmental agenda.” In general, EPA’s portion of the Unified Agenda shows that past priorities — including updates to its greenhouse gas reporting rule — largely remain on track. EPA’s efforts to designate certain Per- and polyfluoroalkyl substances (PFAS) chemicals as CERCLA “hazardous substances” are now scheduled for March 2024. (We discuss PFAS issues in greater detail below.) Finally, EPA now intends to release an effluent limitation guideline for the category consisting of organic chemicals, plastics, and synthetic fibers in May 2024.

Environment, Social, and Governance

ESG issues will continue to be a high priority for the regulated community in 2024. Three issues are worth watching:

  • First, “anti-ESG” litigation will continue with the lead case this year being in New York State Court. This case, Wong v. New York Employers’ Retirement System, is a New York state breach of fiduciary duty case alleging that teachers’ retirement system plan administrators breached their duty to plan participants by divesting from fossil-fuel related businesses. The complaint in the case hitches on to political pressure from politicians, and initial unease of plan administrators, to say that factoring in divestment cost plan participants money and was made for ideological reasons as many fossil-fuel tied companies in the energy industry have had record profits in recent years.
  • Second, we will see sustainability reporting move from voluntary to mandatory with concrete requirements for how companies measure and report on sustainability metrics. We expect the US Securities and Exchange Commission (SEC) to finalize the climate-related disclosures rule, following three California climate disclosure bills finalized in 2023. (See our discussion here.) Public companies will likely be required to report anywhere from 2024 onward, putting them in the difficult position of setting internal goals and making public disclosures that are consistent with regulatory requirements but at the same time do not to create risk of litigation or noncompliance. Given the recent rise in anti-ESG sentiment, the 2024 election year a tug of war between ESG supporters and deniers in the United States.
  • Third, we likely will see social-focused cases have a higher priority in the ESG space in 2024, such as, for example, one regarding the federal government and many businesses to use “sustainable” fuels. Some of the fuel manufacturing processes use plastic as a feedstock, giving rise to “greenwashing” allegations, and the some of the processing locations are in “environmentally overburdened” communities. (For details, see here.) The confluence between new processes, “greenwashing,” and environmental justice (EJ) issues may represent a perfect storm in terms of future litigation.

Supreme Court Cases to Watch

The two issues to watch at the US Supreme Court level: the fate of “Chevron” deference and regulatory “takings.” Summaries:

  • “Chevron” deference. The concept of administrative deference — i.e., that the courts should defer to relevant agencies’ interpretations of ambiguous statutes they are tasked to administer — is a key component to the modern regulatory state. With a paired set of cases –Loper Bright Enterprises v. Raimondoand Relentless, Inc. v. Dept. of Commerce– the Court will evaluate the continued viability of Chevron deference under which courts defer to agencies’ technical decisions related to the statutes they administer. (Our most detailed discussion of this issue is here.)
  • Regulatory takings. In Sheetz v. County of El Dorado, California, the Supreme Court will evaluate whether “impact fees” associated with permits can violate the Fifth Amendment to the US Constitution. At stake is the determination of when, how, and under what circumstances state and local governments can require fees or other conditions in exchange for land-use permit approvals. (Our detailed discussion is here.)

Continued Focus on Plastic and Petrochemicals

In 2023, regulators at all levels addressed plastic — including pollution prevention, recycling initiatives, and extended producer responsibility.

Internationally, at COP28 (the United Nations (UN) Climate change Conference currently taking place through December 12), Inger Andersen, the Under-Secretary-General of the UN and Executive Director of the UN Environment Programme (UNEP) delivered a speech highlighting the climate impact of plastic and plastic production and calling for a road to a global plastics treaty.).

At the federal level, two recycling-related bills were introduced in Congress. The Recycling and Composting Accountability Act would allow the EPA to collect and create a database tracking recycling and composting programs. The Recycling Infrastructure and Accessibility Act of 2023 allows EPA to establish a pilot program to improve recycling accessibility in underserved communities.

And at the state level, at least seven states proposed EPR packaging legislation in 2023. Other states, like California, passed additional legislation, such as The Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54) which seeks to address the impact of single-use packaging and plastic food service ware, in part, by reducing the use of single-use plastic packaging by 25% by 2023.

The focus on plastic regulation is expected to continue in 2024. Many initiatives introduced in past years will take effect in 2024. For example, in 2022, UNEP resolved to complete a draft of a globally binding agreement on plastic pollution by 2024. UNEP released its “zero draft” in September 2023, which is expected to be refined next year. Similarly, EPA issued its draft National Strategy to Prevent Plastic Pollution this year that drew criticism from a group of state attorneys general who called on the EPA to withdraw and redraft the draft document. Several state-level EPR packaging-related laws have compliance dates that also start in 2024, including California’s SB 54 and New Jersey’s recycled content standards. With regulators clearly focused on plastic regulation and reduction, industry has similarly focused on how it might work with regulators to ensure compliance with upcoming legislation, promote their own sustainability initiatives, and potentially shift some of their manufacturing to plastic alternatives.

Environmental Justice

Federal, state, and local regulators have all worked aggressively to address EJ issues in recent years and we expect these efforts to continue. Some predictions:

  • Federal, state, and local EJ prioritization will continue in 2024. EJ will have a role in virtually every aspect of environmental law from the regulatory process through permitting and enforcement. The Biden Administration’s “whole of government” approach will continue. (See here for examples.)
  • At the federal level, as we get closer to the election, we may begin to see EJ efforts tailored to support political ends. Funding and visits from key regulatory personnel may be highlighted in certain parts of the country to support political ends.
  • Efforts to develop science supporting key EJ concepts like cumulative impact will continue. This week, we’ve seen EPA highlight cardiorespiratory concerns highlighted related to a lead pipe replacement program. Regulators may work to develop closer support between public health and policy goals.
  • EJ will continue to drive how regulators prioritize their enforcement resources. And EJ will also likely play a significant role in the ultimate resolution of enforcement matters. (For more on this, see here and here.)
  • Related to permitting, EJ issues to be prioritized, both for new permits, and renewal of existing permits. We have already seen EJ issues directly impact the permitting process at locations across the country and we expect this to continue. (We discuss steps regulated parties can take to minimize these risks here.)
  • EJ issues may begin to surface increasingly in relation to projects like pipeline and transmission line siting and development.

PM NAAQS

EPA is primed to strengthen National Ambient Air Quality Standards (NAAQS) for fine particulate matter (PM), known as PM2.5 (particulate matter smaller than 25 micrometers) in 2024. The revised standard, if promulgated, will have near immediate and significant permitting and operating implications on sources of air pollution across the country.

On January 27, 2023, EPA proposed to lower the current PM2.5 long-term (annual) standard of 12.0 micrograms per cubic meter (ug/m3) to a value between 9.0 to 10.0 ug/m3 (EPA requested comments on an even lower standard of 8.0 ug/m3). Revision of the NAAQS will trigger a mandatory process under the Clean Air Act for states and EPA to determine which areas within each state “attain” (attainment/unclassifiable) or do not attain (nonattainment) the revised annual PM2.5 NAAQS. Revisions to the State Implementation Plans (SIPs) are then required within 18 months of such designations, designed to reduce emissions of PM2.5 in nonattainment areas to achieve compliance with the revised PM2.5 annual NAAQS.

The lowering of the annual PM2.5 NAAQS to 9.0 to 10.0 ug/m3 brings the NAAQS standard precariously close to existing background concentrations of PM2.5 in many states. This will have significant implications on the ability of sources to obtain permits to construct or modify their existing operations, particularly in cases where ambient air quality modeling is needed to demonstrate that a proposed project will not cause or contribute to a violation of the NAAQS (a demonstration that would be near impossible if the facility is located in an area that already exceeds the revised PM2.5 NAAQS). The revised standard will also have significant implications for environmental justice areas like those discussed above.

On June 27, 2023, the White House Environmental Justice Advisory Council issued a letter requesting that EPA lower the annual PM2.5 NAAQS to 8.0 ug/m3 to protect public health disparities in EJ communities, or, alternatively, that such a limit apply specifically in EJ areas. Regardless of whether EPA decides to lower the annual PM2.5 NAAQs to 8.0 rather than 9.0-10.0 ug/m3, the strengthening of the standard will serve to impose additional burdens and restrictions on the regulated community in and around existing and threatened EJ areas.

Coal Combustion Residuals

EPA’s efforts to compel the investigation, characterization, and remediation of legacy coal combustion residuals (CCR) will continue in 2024:

  • On May 18, 2023, EPA proposed a rule to regulate legacy CCR surface impoundments and a new category of unit called CCR management units. The proposal would require owners and operators of power plants to identify CCR management units and to engage in closure and corrective action activities for legacy CCR surface impoundments and CCR management units. EPA is reviewing comments on the proposed rule.
  • EPA is currently under a deadline to finalize a legacy CCR surface impoundment rule by May 6, 2024 under a Consent Decree entered in Statewide Organizing for Community eMpowerment v. EPA, No. 22-cv-2562-JDB (D.D.C.).

Per- and Polyfluoroalkyl Substances

Like CCR, EPA has prioritized addressing health risks associated with PFAS. Since 2021, EPA has been engaged in action to address risk assessment, monitoring and regulation of PFAS through its “PFAS Strategic Roadmap.” 2024 marks the last year addressed through EPA’s roadmap. EPA is currently considering comments on a proposed rule to designate the PFAS chemicals commonly referred to as PFOA and PFOS as hazardous substances under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and an advance notice of proposed rulemaking regarding the designation of seven additional types of PFAS as hazardous substances under CERCLA. Movement on both of these rulemakings is likely in the next year. EPA also has a pending rulemaking to establish National Primary Drinking Water Standards for PFOS, PFOA and mixtures of certain other PFAS. EPA has a stated goal of finalizing this rulemaking by the end of 2023. To the extent a final rule on is not promulgated by the end of 2023, finalization is likely in 2024.

In addition to continued regulation of PFAS, EPA has added addressing exposure to PFAS as one of its National Enforcement and Compliance Initiatives for the years 2024-2027. EPA has noted it will increase enforcement actions to address PFAS “endangerment issues” as they arise. EPA has stated its initial goals under this initiative include: (1) identifying and characterizing PFAS contamination near manufacturing and use facilities under CERCLA, the Resource Conservation and Recovery Act, the Clean Water Act, and the Safe Drinking Water Act; (2) performing oversight of PFAS characterization and control activities at federal facilities to ensure compliance and also to serve as a model for the regulated community; and (3) addressing statutory/regulatory violations and substantial endangerment situations by major PFAS manufacturers, federal facilities, and other industrial parties who have significantly contributed to releases of PFAS into the environment.

Increased State and Local Regulation

Finally, recent years have seen more aggressive efforts by states to themselves regulate the environment. Examples include New York’s recent “Green Amendment,” New Jersey’s recent EJ laws, or, most notably, various climate-related tort and procedural cases pending in various states. (See here, here, and here.) Similarly, local regulators may continue to attempt to use building codes, plastic bag bans, and other efforts to address environmental concerns. We expect these efforts to continue into 2024.

Members of the firm’s Environmental and Energy & Cleantech groups regularly monitor state and federal administrative activity with broad implications to the regulated community.

© 2023 ArentFox Schiff LLP
by: J. Michael Showalter , Francis X. Lyons , Amy Antoniolli , David M. Loring , Bina Joshi and Malerie Ma Roddy of ArentFox Schiff LLP
For more news on 2024 Environmental, Energy, and ESG Issues, visit the NLR Environmental, Energy & Resources section.

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Posted on December 13, 2023Author National Law ForumCategories Administrative & Regulatory, Environmental Law, Supreme CourtTags 2024 ESG updates, Biden administration, business, energy, environment, environmental social governance, ESG, government, legal, supreme court
ESG Considerations for Retirement Plans: A Moving Target

ESG Considerations for Retirement Plans: A Moving Target

For those with an eye on ERISA and its fiduciary rules, the past few years have caused whiplash when it comes to environmental, social, and corporate governance (“ESG”) investments in retirement plans.  With a new rule from the Department of Labor imminent, let’s review where we are, how we got here, and what’s next.

ERISA generally requires those making investment decisions for retirement plans to do so solely in the best interests of plan participants, taking into account pecuniary factors like fees, and risks and returns.  Guidance issued during the Obama administration indicated an openness to non-pecuniary factors, such as ESG, as a “tie-breaker”.  The tide turned during the Trump administration, with additional guidance and a final rule eventually issued, which required plan fiduciaries to “select investment and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action.”

In an unsurprising twist, the Biden administration soon reversed course, blocking the Trump administration’s final rule and issuing its own proposed rule to “remove barriers to plan fiduciaries’ ability to consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights.”  A DOL fact sheet seeks to address concerns that the rule fundamentally changes a fiduciary’s duties, by highlighting the fact that the proposed rule “retains the core principle that the duties of prudence and loyalty require ERISA plan fiduciaries to focus on material risk-return factors and not subordinate the interests of participants and beneficiaries (such as by sacrificing investment returns or taking on additional investment risk) to objectives unrelated to the provision of benefits under the plan.”

The final rule is now under review with the White House and is expected to be released soon.  We will provide an update when that occurs.

Meanwhile, four House Republicans recently introduced the Safeguarding Investment Options for Retirement Act, with the stated purpose of protecting “investors from having politically motivated ‘woke’ environmental, social, and governance (ESG) issues put ahead of hardworking Americans’ investment return.”

What is a plan sponsor or committee to do?  Whatever happens in the upcoming midterms, we expect the rules regarding ESG funds in retirement plans to remain a contentious subject, potentially changing with each presidential administration.  It is imperative for plan fiduciaries to work closely with the plan’s financial advisors and legal counsel to ensure that all relevant factors—including the latest guidance on ESG—are being considered when making plan investment decisions.

For more ESG Legal News, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

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Posted on November 2, 2022November 2, 2022Author National Law ForumCategories Corporate Social Responsibility, Environmental Law, ERISA, financeTags corporate governance, department of labor, environmental social governance, ERISA, ESG, fiduciary duties, retirement plans, retirement savings
EPA Launches Their New Office: What Does the Office of Environmental Justice and External Civil Rights Mean for Companies and ESG in the United States?

EPA Launches Their New Office: What Does the Office of Environmental Justice and External Civil Rights Mean for Companies and ESG in the United States?

On September 24, 2022, the Environmental Protection Agency (EPA) announced the creation of a new national office dedicated to advancing environmental justice (EJ) and civil rights. Known as the Office of Environmental Justice and External Civil Rights, the creation of the new office delivers on a noteworthy campaign promise of President Joe Biden, who committed to elevating these issues during his presidency and ensuring justice and equality for overburdened, underserved communities.

“From day one, President Biden and EPA have been committed to delivering progress on environmental justice and civil rights and ensuring that underserved and overburdened communities are at the forefront of our work,” said EPA Administrator Michael S. Regan. “With the launch of a new national program office, we are embedding environmental justice and civil rights into the DNA of EPA and ensuring that people who’ve struggled to have their concerns addressed see action to solve the problems they’ve been facing for generations.”

“Since the beginning of the Biden Administration, its appointees have consistently stressed the idea of environmental justice,” said Jacob Hupart, Member at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. “Specifically, in this context, the invocation of environmental justice has focused on the principle that addressing the various environmental issues confronting society—including the challenge of climate change—must also take into consideration that underserved communities frequently are disproportionately impacted by environmental issues, and so these communities should receive particular attention. That the Biden Administration is establishing an EPA office dedicated specifically to this issue is congruent with their prior rhetoric and action (such as the appointment of Michael Regan as the EPA Administrator), and emphasizes this aspect of their environmental program.

What is the Intent and Significance of the EPA’s New Office?

With more than 200 EPA staff members across ten regions dedicated to the project, the office will put substantial resources into environmental justice efforts across the United States. This includes, but is not limited to, working with state, local, and Tribal partners to understand their EJ needs, disbursing grants and technical assistance, cooperating with other EPA offices to incorporate EJ initiatives in all areas, and ensuring funding recipients are complying with relevant civil rights laws.

This new focus by the EPA is extremely meaningful not only for environmental justice in the US, but for the direction of major regulatory and administrative bodies. “The EPA and the White House have enunciated policy, established guidance, and issued Executive Orders, but these tools do not have enforceable legal requirements,” explained Richard Glaze, environmental litigator and Partner at Barnes & Thornburg LLP. “Combining the existing Office of Environmental Justice with the External Civil Rights Compliance Office to form the Office of Environmental Justice and Civil Rights sends a signal that the EPA is willing to use enforcement tools with teeth to advance the administration’s Environmental Justice goals.”

Stacey Halliday, environmental lawyer and Principal at Beveridge & Diamond PC, noted how this is a substantial shift from the status quo. “In the past two years, we’ve seen momentum in fits and spurts from a variety of executive branch agencies following the January 27 issuance of EO 14008– including notable action from CEQ, DOE, DOJ, DOT and EPA,” she says. “However, this most recent action by EPA is only likely to accelerate this momentum and have impacts that will extend beyond the Biden Administration. We can expect to see more alignment between EPA program offices […] and a ‘from-the-top’ imperative to incorporate EJ in overall agency decision-making. This is a big change from past practice when EJ and civil rights enforcement were separately housed within other program offices and lacked this level of authority and agency-wide reach.”

“The Department of Justice is fully on board with the EPA in this effort,” added Mr. Glaze. “It recognizes that “Environmental justice and Title VI are both rooted in the same basic principle that no person should bear an unfair share of harm on account of their race, color or national origin” and warns that Title VI of the Civil Rights Act is a powerful  for the coordination of Title VI and Environmental Justice.”

What Does the New EPA Office Mean for Companies?

The EPA’s new office comes at a time when companies are turning their focus to the upcoming recession, reminding them that climate and social justice must remain a top priority even as companies prepare for economic instability. This should send a message to corporations who have already been facing mounting pressure to incorporate climate justice considerations into their missions and operations. By creating a political culture of increased environmental and social scrutiny, the Biden administration is slowly changing “ESG” from a greenwashing buzzword to a corporate obligation.

“Companies seeking to gain the benefit of competitive federal funding,” said Ms. Halliday, “especially following the flush of resources coming from the IIJA and IRA – are more frequently asked to provide a detailed accounting of how they will assess and address EJ impacts, as well as how projects may contribute to the Justice 40 Initiative (directing 40% of benefits from federal climate investments to disadvantaged communities).”

“Although the ultimate impact of this new office is uncertain, as the actual initiatives and enforcement actions brought will have to be assessed and evaluated, at minimum, the creation of this office indicates that policy and enforcement actions centered around environmental justice are more likely to appear over the coming months and years,” added Mr. Hupart. “It should also be noted, however, that other environmental actions undertaken by the Biden Administration—such as the mandatory climate disclosures proposed by the SEC, which would be applicable to all public companies—are more likely to be an immediate focus for corporate America rather than potential EPA enforcement actions focused on specific instances implicating environmental justice concerns.”

What Does the New EPA Office Mean for ESG Considerations?

The environmental, social, and governance movement (ESG) has been undeniably energized by the EPA’s new office, particularly at a time when ESG movements are under scrutiny. If Biden’s plan to make environmental justice a more common business priority succeeds, centering sustainability issues will no longer be enough for firms to differentiate themselves to investors. Corporations targeting ethically-minded shareholders will need to develop more detailed, creative ESG approaches.

“Environmental justice combines elements of the “E” and the “S” of ESG and companies that have embraced ESG are well-advised to consider whether their operations implicate environmental justice and, if they do, give these issues the attention they deserve,” said Mr. Glaze. “Combined with the recent SEC climate disclosure rule, these ESG issues that companies have considered ‘optional’ will now have more force behind them [and companies] can no longer ignore them.”

“Even before the creation of this office, the renewed federal and state prioritization of EJ has had an impact on corporate behavior – driven broadly by federal guidance and tools, new state permitting requirements, targeted environmental enforcement, and investor demand,” said Ms. Halliday. “In the last year or so, we have seen an increase in shareholder proposals related to climate disclosures, racial equity audits and environmental justice audits, with investors seeking to understand how company activities impact disadvantaged communities and implications for long-term value for the company.”

Article By Chandler Ford, Crissonna Tennison, Shelby Garrett, and Casey Karthaus of The National Law Review / The National Law Forum LLC

For more environmental law legal news, click here to visit the National Law Review.

Copyright ©2022 National Law Forum, LLC

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Posted on October 24, 2022October 24, 2022Author National Law ForumCategories Administrative & Regulatory, Business Organizations, Civil Rights, Corporate law, Environmental Law, law firm, Legal News, Tribal LawTags Biden, business, civil rights, companies, EJ, environment, environmental issues, environmental justice, Environmental Law, environmental social governance, EPA, ESG, legal, office of environmental justice, White House
L’Oreal PFAS Lawsuit Shows the Danger of ESG Marketing

L’Oreal PFAS Lawsuit Shows the Danger of ESG Marketing

For the second time in less than a month, L’Oreal finds itself embroiled in a PFAS lawsuit related to its mascara products. The L’Oreal PFAS lawsuit was filed in the New York federal court on March 9, 2022. Cosmetics and PFAS is a topic that saw increased scrutiny from the scientific community, legislature, and the media in 2021. As we predicted in early 2021, the increased attention on the industry presented significant risks to the cosmetics industry, and our prediction was that the developments made the cosmetics industry the number two target for future PFAS lawsuits. In less than three months, four industry giants – Shiseido, CoverGirl, L’Oreal and Burt’s Bees – were hit with lawsuits related to their cosmetics and PFAS content in some of the companies’ products.  The industry, insurers, and investment companies interested in the consumer goods vertical with niche interest in cosmetics companies must pay careful attention to the Burt’s Bees lawsuit and the increasing trend of lawsuits targeting the industry.

PFAS and Cosmetics: the 2021 Foundation

On June 15, 2021, a scientific study in the Journal of Environmental Science and Technology Letters published conclusions regarding testing of a variety of cosmetics products from the United States and Canada for PFAS content, and found PFAS present in over half of the products. On the same day that the study was published, the No PFAS In Cosmetics Act 2021 was introduced in the Senate by U.S. Senators Susan Collins (R-ME), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Maggie Hassan (D-NH), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), and Angus King (I-ME). The bill sought to ban PFAS in cosmetics.

These two developments led us to conclude “with these developments, our prediction that cosmetics is the number two target for PFAS litigation issues behind water rings true.”

Why PFAS In Cosmetics Is A Concern

PFAS content in cosmetics raises concerns for human health in scientific communities due to the fact that PFAS are capable of entering the bloodstream in ways other than direct oral ingestion, and one of these ways includes dermal absorption. Concerns have also been raised regarding absorption of PFAS into the bloodstream by way of tear ducts. The absorption issue is one that is being studied fairly extensively through various pending scientific studies. At the end of 2021, the federal Agency for Toxic Substances and Disease Registry (ATSDR) went so far as to recommend that citizens in Southern New Hampshire reduce their risk of further PFAS exposure by avoiding the use of certain consumer goods, including cosmetics.

L’Oreal PFAS Lawsuit

On March 9, 2022, plaintiffs Zada Hicks and Stephanie Vargas filed a lawsuit in the New York federal court seeking a proposed class action lawsuit against LOreal. The L’Oreal PFAS lawsuit alleges that the company does not disclose to consumers that its mascara and other products contain PFAS. Instead, the lawsuit states, the products were fraudulently and misleadingly marketed as safe for consumers and environmentally friendly, in violation of federal and state consumer laws. The Complaint details several examples of L’Oreal marketing indicating the safe and environmentally-friendly nature of the products.

The plaintiff seeks certification of the class action lawsuit, injunctive relief, damages, fees, costs and a jury trial. The proposed class is any consumer in the United States, or in the subclass of New York, who purchased the relevant L’Oreal products.

Just the Beginning For Cosmetics Industry

With studies underway, legislation pending that targets cosmetics, and increasing media reporting on cosmetics concerns to human health, the cosmetics industry has a target on its back with respect to PFAS that will have impacts on the industry’s involvement in litigation. Twelve months ago, we made this prediction: “Personal injury / products liability cases, false advertising, and failure to disclose theories of liability are some of the more prominent allegations that cosmetics companies are likely to face. Further, the cosmetics industry is concerned about federal and state level regulatory enforcement action for environmental pollution remediation costs stemming from placing PFAS waste into the environment as a by-product of the manufacturing process.”

The first part of our prediction is becoming reality, as four significant cosmetics industry players now find themselves embroiled in litigation focused on false advertising, consumer protection violations, and deceptive statements made in marketing and ESG reports. The lawsuits may well serve as a test case for plaintiffs’ bar to determine whether similar lawsuits will be successful in any (or all) of the fifty states in this country. Each cosmetics company faces the stark possibility of needing to defend lawsuits involving plaintiffs in all fifty states for products that contain PFAS.

It should be noted that these lawsuits would only touch on the marketing, advertising, ESG reporting, and consumer protection type of issues. Separate products lawsuits could follow that take direct aim at obtaining damages for personal injury for plaintiffs from cosmetics products. In addition, environmental pollution lawsuits could seek damage for diminution of property value, cleanup costs, and PFAS filtration systems if drinking water cleanup is required.

Conclusion

It is of the utmost importance that businesses along the whole supply chain in the cosmetics industry evaluate their PFAS risk. Public health and environmental groups urge legislators to regulate PFAS at an ever-increasing pace. Similarly, state level EPA enforcement action is increasing at a several-fold rate every year. Now, the first wave of lawsuits take direct aim at the cosmetics industry. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are therefore becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers.

Article By John Gardella of CMBG3 Law

For more environmental legal news, click here to visit the National Law Review.

©2022 CMBG3 Law, LLC. All rights reserved.

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Posted on March 15, 2022March 15, 2022Author National Law ForumCategories Chemicals, Consumer Protection, Corporate Compliance, Corporate Social Responsibility, Drug & Cosmetic Law, Environmental Law, Health, Legal News, Litigation, Product Liability, RegulatoryTags business, companies, Disclosures, environment, environmental social governance, ESG, L'Oreal, lawsuit, legal, Litigation, PFAS, Resources
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