Top Legal News of 2022: A Review of the Most Notable and Newsworthy Thought Leadership from the National Law Review’s Contributors

Happy New Year from the National Law Review! We hope that the holiday season has been restful and rejuvenating for you and your family. Here at the NLR, we are wrapping up the second season of our legal news podcast, Legal News Reach. Check out episode seven here: Creating A Diverse, Equitable and Inclusive Work Environment with Stacey Sublett Halliday of Beveridge & Diamond! A few weeks ago, we also announced the winners of our 2022 Go-To Thought Leadership Awards! Each year, around 75 recipients are selected for their timely and high-quality contributions to the National Law Review. This year’s slate of winners was particularly competitive – to see the full list, check out our 2022 National Law Review Thought Leadership Awards page.

As we look forward to a bright and busy 2023 for the legal industry, it is more prudent than ever to review the previous year and all that came with it. 2022 was a chaotic and monumental year for not only the legal profession, but for the world at large. The invasion of Ukraine, global supply chain issues, and the ongoing coronavirus pandemic were only some of the many challenges all industries and sectors faced. In the United States, companies and employers dealt with enormous changes at every level, including but not limited to the reversal of Roe v. Wade, shifting attitudes toward cannabis legalization, and ever-changing standards for COVID-19 vaccinations.

Read on below for some thought leadership highlights from this past year, and for a reminder of all that we’ve passed through in 2022:

January

Most prominently in 2022, the US Supreme Court handed down substantial rulings for coronavirus vaccine mandates, which affected not only healthcare workers but all employers across the country. With a 6-3 majority, SCOTUS stayed the Biden Administration’s OSHA Emergency Temporary Standard that applied to all private employers, but simultaneously ruled in a 5-4 majority that issued a 5–4 unsigned majority that vaccine mandates for medical facilities and medical workers can remain.

January also saw noteworthy changes to labor law in the United States, inviting a handful of significant standard changes for all employers. At the end of 2021 and early in 2022, the NLRB considered cases that altered the standard for determining independent contractor status, as well as the standard that established whether a facially neutral work rule violates Section 8(a)(1) of the National Labor Relations Act. These changes also paved the way for briefings on determining appropriate bargaining units.

Read January 2022’s thought leadership focusing on Labor and Employment law and the related Supreme Court rulings  below for more information:

Supreme Court Stays Private Vaccine Mandate; Upholds Requirement for Certain Healthcare Workers

On Again, Off Again Vaccine Mandates: What Should Employers Do Now?

NLRB Rings in the New Year by Inviting Briefing on Multiple, Far-Reaching Standards Impacting Employers

February

On February 24, 2022, Russia launched a large-scale ground invasion of Ukraine, leading to considerable damage and loss of life and throwing the geopolitical landscape into chaos. Both in February and in the months since, the Russia-Ukraine war has placed an extraordinary  strain on the global supply chain and businesses around the world, as the European Union, the United Kingdom, and the United States have continued to enforce sanctions and trade regulations. Companies must be careful to comply with these orders as the political landscape continues to change and learn how to juggle the dual headaches of the lingering COVID crisis and evolving Ukrainian war

Domestically, President Biden nominated Ketanji Brown Jackson to the US Supreme Court. Succeeding Justice Stephen Breyer, Judge Jackson graduated magna cum laude from Harvard University in 1992 and cum laude from Harvard Law in 1996 and has since served as a judge on the U.S. Court of Appeals for the District of Columbia Circuit. She is the first African American woman to serve on the United States’ highest court of law.

Read select thought leadership articles below for more information:

President Biden Nominates D.C. Circuit Judge Ketanji Brown Jackson to U.S. Supreme Court

Russian Invasion of Ukraine Triggers Global Sanctions: What Businesses Need to Know

Consequences from the Ukrainian Conflict

March

March of 2022 saw the long term  impacts from the military conflict in Ukraine emerge locally and around the world. Sanctions continued to affect businesses, leading to global supply chain slowdowns and difficulties in manufacturing and shipping and new immigration changes and challenges. In the US, the Securities and Exchange Commission “SEC” issued new and noteworthy regulations regarding Environmental, Social & Corporate Governance “ESG” and climate change disclosures for public companies. The Supreme Court also heard oral argument for a large slate of cases, perhaps most notably in ZF Auto. US v. Luxshare, Ltd. and AlixPartners v. The Fund for Prot. of Inv. Rights in Foreign States, which interpreted provisions of Title 28 of the US Code’s (“Section 1782”) reach in seeking US-style discovery from a interested party to a foreign proceeding and whether or not ection 1782 can be used to obtain key information for private international arbitrations.

Read key thought leadership articles published in March for more details:

SEC Issues Long-Awaited Proposed Rule on Climate Disclosures

U.S. Supreme Court Hears Oral Argument on Circuit Split Over Scope of 28 U.S.C. § 1782 for Obtaining Discovery in International Arbitrations

The Effects of the Military Conflict in Ukraine on Supply Contracts

April

In April of 2022, the Biden Administration made notable changes to the National Environmental Policy Act, better known as NEPA, which had been substantially altered under the Trump Administration. A number of key provisions were returned to their pre-Trump state in order to better center the administration’s larger focus on environmental justice. Also of note, a US court for the first time contested the Center for Disease Control’s  “CDC’s” travel mask mandate, on the grounds that it exceeded the CDC’s Statutory Authority under the Administrative Procedure Act “the federal APA”. This ultimately led to a vacating of the COVID travel mask mandate on a nationwide basis.

Elon Musk announced his intention to purchase Twitter in April of 2022, as well. Twitter ultimately adopted a shareholder rights plan, known as a poison pill, in hopes of preventingMusk’s hostile takeover. Poison pills are widely regarded as the an effective but a draconian anti-takeover defense available.

Read select  thought leadership articles below for more information:

Biden Administration Walks Back Key Trump Era NEPA Regulation Changes

Twitter Board of Directors Adopts a Poison Pill

Administrative Law Takeaways from the Federal Travel Mask Mandate Decision

May

On May 17th, the first case of Monkeypox in the United States was reported in Massachusetts. In response, the Environmental Protection Agency “EPA” and the federal government implemented a number of policy changes in hopes of preventing a wider spread, including the speedy authorization of anti-Monkeypox claims for certain registered pesticides and disinfectant products.

The SEC and administrative law at large received a considerable blow after the Fifth Circuit’s ruling in Jarkesy v. SEC. The Fifth Circuit Court held that the SEC in-house courts violated a series of constitutional protections, which may result in far-reaching impacts for how administrative bodies are used to regulate in the future. Additionally in May, the Senate confirmed Commissioner Alvaro Bedoya for the Federal Trade Commission “FTC”, shifting the balance of power back at the Commission in favor of the Democratic Party.

Read the following highlighted thought leadership articles published in May  for more information:

EPA Authorizes Anti-Monkeypox Claims for Pre-Designated Disinfectant Products

Fifth Circuit Holds That SEC Administrative Law Courts Are Unconstitutional

Big News at The FTC: Democrats Finally Get the Majority Back

June

In June of 2022, the Supreme Court released its decision in Dobbs v. Jackson, reversing Roe v. Wade’s 50-year precedent of ensuring abortion as a  protected right. Dobb’s is a  momentous decision and has resulted in a myriad of complex issues for employers, healthcare providers and individuals, including the updating of employee policies, healthcare provisions, ethical and criminal considerations for healthcare providers and the protection of personal data, and ultimately represents a massive shift away from women’s bodily autonomy in the United States. And the partial advance leak of the Dobb’s ruling, added to the myriad of concerns about the stability and public perception of the Supreme Court.

Other notable litigation and legislation in June included the passing of the Uyghur Forced Labor Prevention Act, subjecting the importers of raw materials from China to new enforcement provisions. The Supreme Court also ruled in West Virginia v. EPA, limiting the SEC’s ability to enforce ESG requirements on public companies. The West Virginia v. EPA ruling  presents a considerable obstacle for the Biden Administration’s ongoing climate goals.

Read select legal news  articles below for more information:

Employment Law This Week: SCOTUS Overturns Roe v. Wade – What Employers Should Consider [VIDEO]

Uyghur Forced Labor Prevention Act Enforcement Starts on Imports from China and on Imports with China Origin Inputs

Implications of West Virginia v. EPA on Proposed SEC Climate Rules

July

July of 2022 saw a great deal of changes for the Equal Opportunity Commission’s “EEOC’s” COVID testing guidance for employers. The largest change is determining if testing is needed to prevent workplace transmission and interpreting the business necessity standard under the American with Disabilities Act “ADA”.. The labor law landscape around the country also saw an increased focus on pay transparency laws – most notably, New York state passed a bill requiring employers to post salary or wage ranges on all job listings. Notably, this law is quite similar to one already in effect in New York City and Washington state, Colorado, and Jersey City.

Beginning most prominently in July, the cryptocurrency world also found itself under increased scrutiny by the federal government. Of note this month, the SEC filed a complaint against certain Coinbase employees, alleging insider trading and claiming that these employees had tipped off others regarding Coinbase’s listing announcements. This move was one of the more aggressive moves made by the SEC toward the digital asset industry.

Read select legal thought leadership articles published in July for more information:

EEOC Revises COVID-19 Testing Guidance for Employers

SEC v. Wahi: An Enforcement Action that Could Impact the Broader Crypto / Digital Assets Industry

Pay Transparency Laws Are All The Rage: Looks Like New York State Is Joining the Party

August

On August 12, 2022, the Inflation Reduction Act (“IRA”) was passed by Congress, representing enormous changes for industries across the country. Perhaps most notably, the landmark legislation contained new government incentives for the clean energy sector, creating tax incentives for renewable energy projects that previously did not exist. The Act also included 15% alternative minimum corporate tax and a 1% excise tax on stock buybacks to raise government revenue.

The Inflation Reduction Act also provided significant funding for tribal communities, including but not limited to the reduction of drug prices, the lowering of energy costs, and additional federal infrastructure investments. While the funding is not as significant as COVID relief from previous years and there are still some remaining hurdles, the IRA provides groundbreaking new opportunities for Native communities, including those in Alaska and Hawaii.

Read the select legal articles published in August for more information:

The Inflation Reduction Act: How Do Tribal Communities Benefit?

The Inflation Reduction Act: A Tax Overview

Relief Arrives for Renewable Energy Industry – Inflation Reduction Act of 202

September

In September of 2022, Hurricane Ian made landfall in the United States, caused substaintial property damage and loss of life despite preparations ahead of time. After addressing safety concerns, policyholders began reviewing their insurance policies, collecting documentation and filing claims. In addition to filing claims for property damage, corporate policyholders also filed claims for business interruption and loss of business income.

Lawsuits opposing the remaining COVID-19 vaccine mandates also continued throughout the month of September, exceeding 1,000 complaints nationally. Previously, lawsuits had largely targeted the Biden Administration, but additional focus was also directed toward large employers with vaccine mandates.

Of global significance, Queen Elizabeth II, the UK’s longest reigning monarch, passed away at 96 years old. Her funeral was held September 19, 2022, and was a national holiday in the United Kingdom marking the last day of public mourning.

Read following key thought leadership articles on Hurrican Ian, UK Bank Holiday due to the Sovereign’s passing and Employer’s COVID Mandate headaches  for more information:

Hurricane Ian – Navigating Insurance Coverage

Bank Holiday Announced for Her Majesty Queen Elizabeth II’s State Funeral

Challenges Against Employer COVID-19 Vaccine Mandates Show No Sign of Slowing

October

October saw forward movement in environmental justice, cannabis decriminalization, and Artificial Intelligence  “AI” regulation. The EPA launched their new Office of Environmental Justice and External Civil Rights, to work with state, local, and tribal partners providing financial and technical support to underserved communities disproportionately impacted by the ill effects of climate change. The EPA’s new office has 200 staff members across 10 regions and is expected to provide a unifying focus on civil rights and environmental justice for the EPA and federal government as a whole.

President Biden’s pardon of federal marijuana charges and mandate to review the plant’s Schedule I status signaled a shift in cannabis regulation, with the president urging state officials to follow his example and consider the contrast between wealthy cannabis business owners and those imprisoned for possession in the recent past.

Later in the month, the White House Office of Science and Technology Policy addressed the swell of artificial intelligence technology with their Blueprint for an AI Bill of Rights, which provides guidelines to prevent privacy violations, implicit bias, and other forms of foreseeable harm.

Read selected thought leadership articles below for more information:

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?

“Up in Smoke?” President Biden Announces Pardons and Orders Review of Cannabis Classification

The White House’s AI Bill of Rights: Not for the Robots

November

November was dominated by a nail-biting midterm election season, a cryptocurrency catastrophe, and NDA (Non Disclosure Agreement) reform. While the midterms did not result in a Red Wave as expected, Republicans were able to regain a small majority in the House of Representatives, with the Senate remaining in Democratic control.

The digital finance world was considerably less stable, with the second largest cryptocurrency trading platform, FTX, filing for bankruptcy three days after its lawyers and compliance staff abruptly resigned. The collapse brought into stark relief the importance of solidifying the cryptocurrency custody and insurance landscape.

Also of note, President Biden signed the Speak Out Act, rendering unenforceable nondisclosure and nondisparagement agreements signed prior to incidents of sexual harassment or assault. The law’s passage offers employers the opportunity to review their states’ more robust laws in this area and ensure clauses meant to protect trade secrets and proprietary information don’t inadvertently create issues for sexual misconduct claimants.

Read select  thought leadership articles below fora deeper dive:

2022 Midterm Election Guide

The Spectacular Fall of FTX: Considerations about Crypto Custody and Insurance

Nondisclosure and Nondisparagement Agreements in Sexual Harassment and Assault Cases: Speak Out Act Heads to President’s Desk

December

In December, the Federal Trade Commission (FTC) released their hotly anticipated “Green Guides” amendment proposals, intended to combat greenwashing amidst growing demand for environmentally friendly products. The amended Guides for the Use of Environmental Marketing Claims would impose stricter standards for the use of terms such as “recyclable,” “compostable,” “organic,” and “sustainable” in advertising and on packaging.

Meanwhile, Congress narrowly avoided a railroad worker strike by passing Railway Labor Act legislation affirming all tentative agreements between rail carriers and unions. The contracts included a roughly 24% increase in wages over 4-5 years, along with an extra day of leave. Biden promised to address paid leave further in the near future.

The National Labor Relations Board (NLRB) closed out 2022 with a number of impactful decisions favoring workers. Employees have expanded remedies for National Labor Relations Act violations and protection during Section 7 questioning, while employers have the burden of proof when seeking to expand micro-units or deny union protestors.

Read select legal thought leadership pieces below for more details:

Congress Votes to Impose Bargaining Agreement to Avoid Nationwide Railroad Strike

FTC Starts Long-Awaited Green Guides Review

NLRB Issues Flurry of Blockbuster End-of-Year Decisions (With More to Come?) (US)

Thank you to our dedicated readers and as always to our highly regarded contributing authors and our talented NLR editorial staff for working day in and day out to produce one of the most well read and reputable business law publications in the US.  Have a happy 2023!

Copyright ©2023 National Law Forum, LLC

Federal PFAS Drinking Water Standards: 2023 Is the Year

On Friday, October 7, 2022, the EPA formally sent its proposed federal PFAS drinking water standards to the White House Office of Management and Budget (OMB) for consideration and approval or rejection. The proposed rule cleared OMB review on November 30, 2022; however, the EPA has not yet released the proposed rule. While the details of the rule under consideration are not yet known, what is evident from the title of the document logged on the OMB website is that the drinking water standards will address PFOA and PFOS. At least from the document title, it does not appear that any other PFAS will be subject to Safe Drinking Water Act (SDWA) regulation at the moment.

The delay in releasing the proposed drinking water standards for over a month now, though, could suggest that the proposed rule may seek to regulate more than just PFOA and PFOS, and the EPA may be looking to shore up language and support language in the proposed rule for such a proposal in light of comments from the OMB. Similarly, many wonder whether the EPA proposed a limit so low that the OMB had concerns as to whether the limits were detectable. With the EPA keeping its proposed language a closely guarded secret for the time being, much of the discussions rest on speculation. What we do know is that he EPA is statutorily required to put forth a proposed standard before the first half of 2023, and it has publicly pledged repeatedly to act more quickly than that statutory requirements.

Thus, 2023 will see federal PFAS drinking water standards for at least two PFAS from the EPA and we predict that it is only a matter of days before the country sees the EPA’s proposal, which will kick off what promises to be an extremely contentious public comment period.

Now more than ever, the EPA is clearly on a path to regulate PFAS contamination in the country’s water, land and air. These regulations will require states to act, as well (and some states may still enact stronger regulations than the EPA). Both the federal and the state level regulations will impact businesses and industries of many kinds, even if their contribution to drinking water contamination issues may seem on the surface to be de minimus. In states that already have PFAS drinking water standards enacted, businesses and property owners have already seen local environmental agencies scrutinize possible sources of PFAS pollution much more closely than ever before, which has resulted in unexpected costs. Beyond drinking water, though, the EPA PFAS Roadmap from 2021 shows the EPA’s desire to take regulatory action well beyond just drinking water, and companies absolutely must begin preparing now for regulatory actions that will have significant financial impacts down the road.

©2023 CMBG3 Law, LLC. All rights reserved.

Beware Before You Flare: EPA Revamps Rulemaking to Pave the Way for Methane Emission Reductions

On November 15, 2022, the United States Environmental Protection Agency (US EPA) issued the pre-publication version of supplemental proposed rulemaking for reduction of methane emissions in the oil and natural gas sector. The original proposed rule, published on November 15, 2021, sought to strengthen methane standards for new sources (New Source Performance Standards or NSPS), establish nationwide emission guidelines (EG) for regulation of existing sources, and develop new standards for unregulated sources. US EPA ultimately received more than 470,000 public comments. The rules, once finalized, will be included in 40 CFR Part 60, Subpart OOOOb (NSPS) and Subpart OOOOc (EG).

The agency anticipated a need for additional review in the original proposed rule, in which US EPA stated it would issue supplemental proposed rulemaking under its authority in the Clean Air Act sections 111(b) and (d). While the original rule already had an ambitious target of reducing methane by 74%, the supplemental proposal would reduce methane from covered sources by 87% below 2005 levels. The rule generally governs production and processing (i.e., well sites, compressor stations, and natural gas processing plants) as well as natural gas transmission and storage.

Key changes in the supplemental proposed rule include the following:

  • Super-emitter Response Program: Establishment of a super-emitter response program intended to reduce the risk of such events. Owners or operators that receive certified notifications of emissions greater than 100 kg/hr of methane would be required to take action.
  • Well Closure Plans: EPA will now require owners of well sites to submit a well closure plan that includes steps to plug wells, requires financial assurance, and includes a schedule to complete the closure and perform a final survey.
  • Advanced Methane Detection: In response to comments supporting advanced methane detection technologies, EPA has proposed a matrix where owners and operators have the flexibility to use approved alternative screening approaches with development of a plan and notification to the agency. The agency will further update the proposed protocol for optical gas imaging (OGI) in Appendix K.
  • Leak Inspection: EPA will now require identification and correction of leaks, a source of fugitive emissions, at all well sites, including new and existing. While EPA removed exemptions, the type of leak monitoring will vary depending on site characteristics and equipment in four primary categories: (1) single wellhead-only and small well sites; (2) wellhead-only sites with two or more wellheads; (3) sites with major production and processing equipment; and (4) well sites on the Alaska North Slope.
  • Flares: EPA will require flare flames to be lit at all times. Additionally, in order to flare, owners of oil wells with associated gas will be required to either implement alternatives permitted by the rule (such as routing to a sales line) or certify that alternatives are not safe or technically feasible.
  • Additional Regulated Sources: EPA has added strengthened standards for pneumatic pumps (zero-emission standard), updated standards for wet seal centrifugal compressors, and developed new standards for dry seal centrifugal pumps (currently unregulated).

Given the agency’s significant focus on environmental justice and community outreach, US EPA also seeks to provide more opportunities for vulnerable communities and Tribal communities to participate in the development of state plans. In fact, the agency held a webinar specific to Tribal communities and environmental justice communities on November 17, 2022. During the webinar, US EPA explained how the revised rule requires states to conduct meaningful engagement with vulnerable communities through early outreach and request for input. States developing plans for EG will be required to participate in “timely engagement with pertinent stakeholder representation . . . [i]t must include the development of public participation strategies to overcome linguistic, cultural, institutional, geographic, and other barriers to participation to assure pertinent stakeholder representation.”

The agency is also seeking additional insight from the regulated industry on advanced technologies that can be utilized to reduce methane and utilize associated gas. The original proposed rule requested public comment on a potential standard for oil wells with associated gas that would require owners or operators to route associated gas to a sales line or, alternatively, use it for another beneficial use. During this round of comments, US EPA now seeks to understand emerging technologies “that provide uses for the associated gas in a beneficial manner other than routing to a sales line, using as a fuel, or reinjecting the gas.”

The agency extended the timeline for a final rulemaking to 2023 and has issued new opportunities for public comment and training. Written comments are due to the agency by February 13, 2023 and can be submitted to Docket No. EPA-HQ-OAR-2021-0317. There will also be a series of public hearings on January 10-11, 2023 that require advance registration. To assist in preparation, US EPA published a document highlighting areas where the agency continues to seek public input. We are prepared to assist clients in engaging with the agency by providing comment and preparing for the final rule to be implemented next year.

© Copyright 2022 Squire Patton Boggs (US) LLP

EPA Announces the Release of Its Endangered Species Act Workplan Update

On November 16, 2022, the U.S. Environmental Protection Agency (EPA) announced it released an Endangered Species Act (ESA) Workplan Update (Workplan Update) that outlines major steps to increase protections for wildlife and regulatory certainty for pesticide users. The Workplan Update details how EPA will pursue protections for nontarget species, including federally listed endangered and threatened (i.e., listed) species, earlier in the process for pesticide registration review and other Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) actions. According to EPA, these early protections will help EPA comply with the ESA, thus reducing its legal vulnerability, providing farmers with more predictable access to pesticides, and simplifying the ESA-FIFRA process that, left unchanged, creates both significant litigation risk and a workload far exceeding what EPA has the resources to handle.

EPA states this update is a follow-up to EPA’s April 2022 ESA Workplan that addresses the complexity of meeting its ESA obligations for thousands of FIFRA actions annually. The ESA Workplan prioritizes certain FIFRA actions for ESA compliance, outlines how EPA will pursue early mitigation for listed species under FIFRA, and describes directions for expediting and simplifying the current pesticide consultation process.

As part of registering new pesticides or reevaluating pesticides during registration review, EPA has a responsibility under the ESA to ensure certain pesticide registrations do not jeopardize the continued existence of listed species or adversely modify their designated critical habitats. EPA states that it has seen in the past few decades an increase in litigation due to EPA’s failure to meet its ESA obligations when taking FIFRA actions. Over the next six years, existing court-enforceable deadlines will require EPA to complete ESA reviews for 18 pesticides — the most EPA estimates it can handle during this period based on its current capacity and processes. Ongoing litigation and settlement discussions for other lawsuits cover dozens of additional pesticides and will likely fill the EPA’s ESA workload well beyond 2030. According to EPA, if its ESA efforts continue at this pace, a future court may decide to curtail drastically pesticide use until EPA meets its obligations. EPA believes this situation would be unsustainable and legally tenuous and provide inadequate protection for listed species and create regulatory uncertainty for farmers and other pesticide users.

The Workplan Update is EPA’s first update to the ESA Workplan and covers four main goals:

  1. Describes EPA’s overall approach to mitigating ecological risks in registration review, which includes prioritization of registration review cases based on opportunities to reduce a pesticide’s risk to human health or the environment.

  2. Proposes a menu of FIFRA Interim Ecological Mitigation measures that EPA will draw from for many future conventional and biological pesticide registration and registration review actions to protect nontarget species. For each FIFRA action, EPA will consider this menu and propose, based on the risks and benefits of the particular pesticide, which specific measures to include on the pesticide label.

  3. Proposes label language to expand the use of online endangered species protection bulletins to implement geographically specific mitigation measures for individual listed species. These measures are designed to focus protections only in specific needed areas, thus minimizing impacts to agriculture. Where needed, EPA may develop these measures to complement the generic FIFRA ecological mitigation described above.

  4. Describes current and future programmatic initiatives with other federal agencies to prioritize mitigation for listed species that are particularly vulnerable to pesticides and to improve the efficiency and timeliness of the ESA-FIFRA process.

The first strategy described in EPA’s ESA Workplan is to “meet ESA obligations for FIFRA actions.” EPA states as part of its work to execute this strategy, it has identified a menu of Interim Ecological Mitigation measures it will use as a starting point to address pesticide risks to nontarget species during registration and registration review.

The menu of Interim Ecological Mitigation will include measures to reduce pesticide spray drift and pesticide runoff and will be considered as part of EPA’s upcoming proposed interim registration review decisions. While EPA intends for this set of Interim Ecological Mitigation measures to apply widely to many pesticides, EPA will consider the menu of options for any given pesticide depending on the level of risk that it poses to species and the exposure route.

EPA anticipates that this approach will more efficiently establish protections for nontarget species, including listed species, and standardize the protections across similar pesticides, in contrast to identifying mitigation measures pesticide by pesticide or species by species, as EPA has typically done in the past.

EPA states it will also work with registrants to add language on pesticide incident reporting, advisory language to protect insect pollinators, and language to most outdoor-use pesticide labels that directs users to reference Bulletins Live! Two, a website where pesticide users can find endangered species protection bulletins. These bulletins describe geographically specific use limitations to protect threatened and endangered species and their designated critical habitat.

EPA expects that once consultation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service is completed for any given outdoor-use pesticide, endangered species protection bulletins may be necessary for at least one listed species.

EPA also expects that working with registrants proactively to add the reference to Bulletins Live! Two to pesticide labels in advance of consultation will ultimately save EPA, state partners, and registrants time and resources by minimizing the number of amendments to labels.

The ESA Workplan Update also describes initiatives that, according to EPA, will help it and other federal agencies improve approaches to mitigation under the ESA and improve the interagency consultation process outlined in the ESA Workplan. These initiatives include EPA’s work to identify ESA mitigation measures for pilot species, incorporate early ESA mitigation measures for groups of pesticides (e.g., herbicides), and develop region-specific ESA mitigations.

Comments on the proposed set of interim mitigation measures and the proposed revisions to label language included in the Workplan Update appendix are due on or before January 30, 2023. Comments can be submitted at EPA-HQ-OPP-2022-0908.

Commentary

This next phase of the ESA Workplan provides more detail about how EPA plans to impose various mitigation measures to meet its ESA obligations when registering a pesticide. The most favorable view of what EPA has presented is that it continues the march toward ESA compliance, which is long overdue, and provides more detail about the kinds of mitigation approaches it will place on pesticide labels to meet ESA requirements. The less favorable view here is that EPA has outlined a number of “off the shelf” mitigation options (buffers to reduce pesticide drift and water runoff), and EPA might impose such conditions in many instances where more careful analysis of usage data and site- or use-specific considerations might lessen the areas where such mitigation measures are needed.

EPA has stated previously as part of its earlier Workplan document, issued in April 2022, that using the present approaches EPA would complete only 5 percent of the ESA required reviews in about 18 years — implying that the current approach would take about 360 years to complete. This next iteration of the Workplan, describing “early mitigation” strategies, is designed to reduce this unacceptable timeframe (360 years), but is likely to lead to fears among some stakeholders that in a “rush” to complete this work, EPA will make overly conservative label restrictions and reduce availability of the pesticide without increased species protections. Such concerns raise immediate ancillary concerns about stakeholder involvement in decision-making, compliance with what might be complicated label requirements, and enforcement of what is already typically a long list of label requirements for many current products. An example of such issues: one mitigation option example discussed is “do not use when rain is expected in the next 48 hours” — which could raise issues concerning what or how compliance might be proven or enforced.

Again, to be sure, this next document about how EPA plans to make significant progress in meeting its ESA obligations continues the effort to convince courts that it is meeting its ESA obligations. As such, it represents a large step forward where in the past EPA was left with little progress or plans to present in court as part of litigation over ESA compliance. As it continues to reveal its plans and options, however, stakeholders will need to follow closely and consider the possible impacts of the Workplan and the resulting label proposals to follow.

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©2022 Bergeson & Campbell, P.C.

EPA’s Contaminant List Includes All PFAS

We previously reported on the EPA’s announcement for its Draft Fifth Contaminant Candidate List (CCL 5), which contemplated listing all PFAS as an entire class on the Contaminant List. On October 28, 2022, the EPA issued its prepublication version of the final CCL 5 rule. The EPA’s contaminant list final version is the first step in the Safe Drinking Water Act regulatory process, which will allow the EPA to begin its assessment into any of the over 12,000 PFAS as to whether they should be included in a drinking water enforceable limit. Such a move would build upon the EPA’s current progress towards regulating PFOA and PFOS with an enforceable drinking water limit, and open the door to significant future enforcement action and litigation.

EPA’s Contaminant List and PFAS

On October 28, 2022, the EPA announced its Final Fifth Contaminant Candidate List (CCL 5). The CCL is a list of contaminants that are currently not subject to any proposed or promulgated national primary drinking water regulations, but are known or anticipated to occur in public water systems. Contaminants listed on the CCL may require future regulation under the Safe Drinking Water Act (SDWA). On the CCL 5 are 66 individual chemicals, but notably PFAS as an entire class are also listed on the CCL 5. Simply because PFAS are listed on the CCL 5 does not guarantee that regulation will occur; however, it does open doors to research that are not otherwise available without the listing on the CCL.

The EPA’s contaminant list rule is not the only step the agency has taken with respect to PFAS and drinking water, but developing the CCL is the first step under the Safe Drinking Water Act (SDWA) in potentially regulating drinking water contaminants. SDWA requires EPA to publish a list of currently unregulated contaminants that are known or anticipated to occur in public water systems and that may require regulation. EPA must publish a CCL every five years. The CCL does not create or impose regulatory burden on public water systems or state, local, or Tribal governments. EPA has completed four rounds of CCLs since 1996. The last cycle of CCL, CCL 4, was published in November 2016. EPA began the development of the CCL 5 in 2018 by asking the public to nominate chemicals, microbes, or other materials for consideration for the CCL 5.

Impact On Businesses and Litigation

Many companies assume that any regulation under the Safe Drinking Water Act will not impact them, as virtually no industries, aside from water utilities, have any direct impact on drinking water. However, this belief provides a false sense of security that must immediately be dispelled. There are three specific ways that drinking water limits for PFAS will trigger scrutiny on environmental practices of businesses: (1) elffluent discharges into water sources; (2) waste sent to landfills that may leach into drinking water sources; and (3) properties abutting or in the vicinity of water sources.

Direct industry effluent discharges into water sources (which may not be drinking water sources, but may feed into drinking water sources) will be the low-hanging fruit target for local environmental agencies at the state level. Companies must ensure that they have all permitting in order, and it is advisable that the permitting specifically encompasses PFAS. Failing to do so will cause issues down the line when local environmental regulatory bodies look to determine, even retroactively, who PFAS water polluters are or were, as those agencies seek to hold businesses responsible for the costs associated with cleaning up PFAS in drinking water.

Companies that send their industrial waste to landfills are also well advised to do a full compliance check. While many companies do not use PFAS directly in their own manufacturing processes, do the parts or other raw materials used in the manufacturing process have PFAS contamination issues? If so, a company could unknowingly send PFAS-laden industrial waste products to landfills, and so these are questions that companies must get answers to. Over time, it is possible that the PFAS may leach out of the landfill and find their way into local water sources. Environmental regulatory agencies will look to these sites, the owners of the sites, and potentially companies sending waste to the sites as responsible parties for PFAS contamination in waterways.

Finally, even businesses having nothing to do with PFAS or manufacturing from which PFAS could be a contaminant need to follow news regarding PFAS regulations. For example, has the property on which your business sits ever had fires that have required a local fire department to extinguish flames using foam (historically, a PFAS containing product)? What did the owner of the site prior to you use the site for? Were there possible PFAS contamination issues stemming from that prior business? Did your due diligence reports and tests when purchasing the property take PFAS into consideration? If PFAS were a contaminant on the land on which your business now operates, local environmental agencies will pursue cleanup costs from any such business regardless of knowledge or intent, and regardless of whether the PFAS issues were the result of a prior company on the site. These investigations and remediations can be extremely expensive and disruptive to businesses.

Should the EPA broaden its regulations for PFAS in drinking water to include more than PFOA and PFOS, this will trigger considerable enforcement action at the state level to identify responsible parties and ensure that the parties pay for remediation costs. Historically, this has also led to civil litigation, as companies identified as responsible parties litigate the percent allocation that they are responsible for the alleged pollution, and look to bring in additional companies to reduce allocation shares for remediation costs.

Conclusion

Future regulatory steps for certain PFAS under the Safe Drinking Water Act will require states to act (and some states may still enact stronger regulations than the EPA). Both the federal and the state level regulations will impact businesses and industries of many kinds, even if their contribution to drinking water contamination issues may seem on the surface to be de minimus. In states that already have PFAS drinking water standards enacted, businesses and property owners have already seen local environmental agencies scrutinize possible sources of PFAS pollution much more closely than ever before, which has resulted in unexpected costs. Companies absolutely must begin preparing now for regulatory actions that will have significant financial impacts down the road.

©2022 CMBG3 Law, LLC. All rights reserved.

CERCLA PFAS Designation Major Step Forward

On January 10, 2022, the EPA submitted a plan for a PFAS Superfund designation to the White House Office of Management and Budget (OMB) when it indicated an intent to designate two legacy PFAS – PFOA and PFOS – as “hazardous substances” under the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA, also known as the Superfund law). The EPA previously stated its intent to make the proposed designation by March 2022 when it introduced its PFAS Roadmap in October 2021. Under the Roadmap, the EPA planned to issue its proposed CERCLA designation in the spring of 2022. On Friday, a CERCLA PFAS designation took a significant step forward when the OMB approved the EPA’s plan for PFOA and PFOS designation. This step opens the door for the EPA to put forth its proposed designation of PFOA and PFOS under CERCLA and engage in the required public comment period.

Any PFAS designation will have enormous financial impacts on companies with any sort of legacy or current PFOA and PFOS pollution concerns. Corporations, insurers, investment firms, and private equity alike must pay attention to this change in law when considering risk issues.

Opposition to CERCLA Designation

Since the EPA’s submission of its intent to designate PFOA and PFOS as hazardous substance to the OMB, the EPA has been met with industry pushback on the proposal. Three industries met with the OMB earlier in 2022 to explain the enormity of regulatory and cleanup costs that the industries would face with a CERCLA designation of PFOA and PFOS – water utilities, waste management companies, and the International Liquid Terminals Association. These industries in particular are concerned about bearing the burden of enormous cleanup costs for pollution that third parties are responsible for. Industries are urging the OMB and EPA to consider other ways to achieve regulatory and remediation goals aside from a CERCLA designation.

During an April 5, 2022 meeting of the Environmental Council of the States (ECOS), several states also expressed concerns regarding the impact that a CERCLA designation for PFAS types would have in their states and on their constituent companies. The state environmental leaders discussed with EPA representatives how the EPA would view companies in their states that fall into categories such as waste management and water utilities, who are already facing uphill battles in disposing of waste or sludge that contains PFAS.

Realizing that the EPA is likely set on its path to designate at least two PFAS as “hazardous substances”, though, industries are asking the EPA to consider PFAS CERCLA exemptions for certain industries, which would exempt certain industry types from liability under CERCLA. Industries are also pushing the EPA, OMB and the U.S. Chamber of Commerce to conduct a robust risk analysis to fully vet the impact that the designation will have on companies financially. The EPA is statutorily required to conduct a risk analysis as part of its CERCLA designation process, so it is likely that the EPA’s delay in issuing a proposed hazardous substance designation until it feels that adequate time has passed for its designation to survive the likely legal challenges that will likely follow the designation.

CERCLA PFAS Designation: Impact On Businesses

Once a substance is classified as a “hazardous substance” under CERCLA, the EPA can force parties that it deems to be polluters to either cleanup the polluted site or reimburse the EPA for the full remediation of the contaminated site. Without a PFAS Superfund designation, the EPA can merely attribute blame to parties that it feels contributed to the pollution, but it has no authority to force the parties to remediate or pay costs. The designation also triggers considerable reporting requirements for companies. Currently, those reporting requirements with respect to PFAS do not exist, but they would apply to industries well beyond just PFAS manufacturers.

The downstream effects of a PFOA and PFOS designation would be massive. Companies that utilized PFOA and PFOS in their industrial or manufacturing processes and sent the PFOA/PFOS waste to landfills or otherwise discharged the chemicals into the environment will be at immediate risk for enforcement action by the EPA given the EPA’s stated intent to hold all PFAS polluters of any kind accountable. Waste management companies should be especially concerned given the large swaths of land that are utilized for landfills and the likely PFAS pollution that can be found in most landfills due to the chemicals’ prevalence in consumer goods. These site owners may be the first targeted when the PFOA/PFOS designation is made, which will lead to lawsuits filed against any company that sent waste to the landfills for contribution to the cost of cleanup that the waste management company or its insured will bear.

Also of concern to companies are the re-opener possibilities that a CERCLA designation would result in. Sites that are or were previously designated as Superfund sites will be subject to additional review for PFOA/PFOS concerns. Sites found to have PFOA/PFOS pollution can be re-opened by the EPA for investigation and remediation cost attribution to parties that the EPA finds to be responsible parties for the pollution. Whether through direct enforcement action, re-opener remediation actions, or lawsuits for contribution, the costs for site cleanup could amount to tens of millions of dollars, of course depending on the scope of pollution.

Conclusion

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

©2022 CMBG3 Law, LLC. All rights reserved.

EPA Updates Safer Chemical Ingredients List, Adding 22 Chemicals and Changing the Status of One Chemical

The U.S. Environmental Protection Agency (EPA) announced on August 11, 2022, that it updated the Safer Chemical Ingredients List (SCIL), “a living list of chemicals by functional-use class that EPA’s Safer Choice program has evaluated and determined meet the Safer Choice Standard.” EPA added 22 chemicals to the SCIL. EPA states that to expand the number of chemicals and functional-use categories on the SCIL, it encourages manufacturers to submit their safer chemicals for review and listing on the SCIL. In support of the Biden Administration’s goals, the addition of chemicals to the SCIL “incentivizes further innovation in safer chemistry, which can promote environmental justice, bolster resilience to the impacts of climate change, and improve water quality.” According to EPA, chemicals on the SCIL “are among the safest for their functional use.”

EPA also changed the status for one chemical on the SCIL and will remove the chemical from the list in one year “because of a growing understanding of the potential health and environmental effects.” According to EPA, the chemical was originally listed on the SCIL based on data from a closely related substance that EPA marked with a grey square earlier this year. EPA’s process for removing a chemical from the SCIL is first to mark the chemical with a grey square on the SCIL web page to provide notice to chemical and product manufacturers that the chemical may no longer be acceptable for use in Safer Choice-certified products. A grey square notation on the SCIL means that the chemical may not be allowed for use in products that are candidates for the Safer Choice label, and any current Safer Choice-certified products that contain this chemical must be reformulated unless relevant health and safety data are provided to justify continuing to list the chemical on the SCIL. EPA states that the data required are determined on a case-by-case basis. In general, data useful for making such a determination provide evidence of low concern for human health and environmental impacts. Unless information provided to EPA adequately justifies continued listing, EPA then removes the chemical from the SCIL 12 months after the grey square designation.

According to EPA, after this update is made, there will be 1,055 chemicals listed on the SCIL. EPA is committed to updating the SCIL with safer chemicals on a regular basis. EPA states that the SCIL is a resource that can help many different stakeholders:

  • Product manufacturers use the SCIL to help make high-functioning products that contain safer ingredients;
  • Chemical manufacturers use the SCIL to promote the safer chemicals they manufacture;
  • Retailers use the SCIL to help shape their sustainability programs; and
  • Environmental and health advocates use the SCIL to support their work with industry to encourage the use of the safest possible chemistry.

EPA’s Safer Choice program certifies products containing ingredients that have met the program’s rigorous human health and environmental safety criteria. The Safer Choice program allows companies to use its label on products that meet the Safer Choice Standard. The EPA website contains a complete list of Safer Choice-certified products.

©2022 Bergeson & Campbell, P.C.

PFAS Health Advisories Under Legal Attack…Again

On June 15, 2022, the EPA issued Health Advisories (HAs) for five specific PFAS, including PFOA and PFOS. On July 29, 2022, the American Chemistry Council filedpetition in the Court of Appeals for the District of Columbia challenging the validity of the EPA’s PFOA and PFOS HAs. The group alleges that the EPA did not follow proper procedure in setting the HAs and that the EPA’s determinations were scientifically flawed. The petition follows closely on the heels of a similar challenge to the EPA’s HA for GenX PFAS. Industries that will be impacted by upcoming EPA PFAS regulations will closely follow the petition as it makes its way through court, as it may provide predictive indicators of arguments that will unfold as the EPA’s PFAS regulations increase.

PFAS Health Advisories

In October 2021, the EPA released its PFAS Roadmap, which stated explicit goals and deadlines for over twenty action items specific to PFAS. As part of the Roadmap, the EPA pledged to re-assess the existing Health Advisories (HAs) for PFOA and PFOS, as well as establish HAs for PFBS and GenX chemicals. In June 2022, the EPA fulfilled its promise on all fronts when it set HAs for PFOA (interim), PFOS (interim), PFBS (final) and GenX (final). While not enforceable levels for PFAS in drinking water, the EPA’s PFAS Health Advisories are nevertheless incredibly significant for a variety of reasons, including influence on future federal and state drinking water limits, as well as potential impacts on future PFAS litigation.

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

PFOA

.004 ppt

PFOS

.02 ppt

GenX

10 ppt

PFBS

2,000 ppt

Legal Challenge To PFAS Health Advisories

On July 13, 2022, The Chemours Company filed a petition challenging the validity of the EPA’s GenX HA. On July 29, 2022, the American Chemistry Council (ACC) followed suit and petitioned to have the EPA’s HAs for PFOA and PFOS vacated. In the petition, the ACC argues that the EPA circumvented procedural requirements in the Safe Drinking Water Act by setting interim HAs for PFOA and PFOS and that the EPA is improperly attempting to create enforcement standards for drinking water that are unattainable. While the HAs themselves are not enforceable, the ACC argues that the HAs are relied upon by states when they set their own drinking water standards and signal an EPA intent to set unachievably low levels of enforceable PFAS standards at the federal level. The ACC points to recent findings by the Science Advisory Board (SAB) that criticized the EPA’s reliance on the same studies and scientific articles upon which the HAs were based.

Conclusion

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

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.

After EPA Rule Changes, Which ASTM Phase I ESA Standard Should You Use?

On November 1, 2021, ASTM International released its revised standard for Phase I Environmental Site Assessments. On March 14, 2022, the U.S. Environmental Protection Agency (the “EPA”) published a Direct Final Rule that confirmed the new ASTM standard, ASTM E1527-21, could be used to satisfy the EPA’s All Appropriate Inquiry (“AAI”) regulations. That, in turn, would mean that satisfying the ASTM E1527-21 standard could help a potential buyer of contaminated property satisfy some of the EPA’s requirements to qualify as a Bona Fide Prospective Purchaser, which may lead to being protected from liability under the federal Superfund statute.

However, on May 2, 2022, EPA withdrew the Final Rule it had published on March 14, 2022, and indicated it would address the comments it received concerning the previously Final Rule in a subsequent final action.

Why the change and, more importantly, which ASTM standard should a potential purchaser of contaminated property use when having a Phase I Site Assessment prepared?

EPA withdrew its Direct Final Rule in response to the negative comments it received concerning that rule. EPA had planned to allow both the November 2021 ASTM standard and its predecessor from 2013 (the ASTM E1527-13 standard) to be used to satisfy certain AAI requirements. Those commenting said that approach would lead to confusion in the marketplace, and would allow reports that did not meet the ASTM E1527-21 standard to be considered adequate, even though the 2021 ASTM standard represented what the real estate and environmental community had determined to be good commercial and customary practice. In other words, because the 2021 standard required a more rigorous approach to the relevant environmental due diligence work needed to prepare a Phase I Environmental Site Assessment, EPA’s approach would have meant that less thorough reports could have been deemed sufficient.  As noted in the comment letter submitted to the EPA by the Environmental Bankers Association, “ASTM E1527-21 includes important updates that will reduce the risk of Users [of the ESA report] failing to identify conditions indicative of hazardous substance releases, potentially jeopardizing landowner [and prospective purchaser] liability protections to [potential] CERCLA [liability].” All of that makes sense: the better the environmental due diligence, the less risk of unpleasant surprises later.

But, where does that leave potential purchasers of contaminated real estate? Should they have their consultants prepare their Phase I Site Assessment reports based on the 2021 ASTM standard, or its 2013 predecessor, or both?

Contaminated real estate buyers, and any other parties involved in the transaction, such as lenders and equity investors, should require their environmental consultants to prepare their Phase I Environmental Site Assessment in conformance with the ASTM E1527-13 standard, because that is the ASTM standard that is currently referenced in EPA’s AAI regulations. It is necessary to do so, at least for now, in order to be able to qualify for Bona Fide Prospective Purchaser protection from CERCLA liability.

Those parties should also consider having their environmental consultants prepare the same Phase I Environmental Site Assessment in conformance with the updated ATSM E1527-21 standard. While some additional cost may be involved, nonetheless it may be worthwhile in order to meet what ASTM sees as the current standard of practice regarding these reports.

Another important consideration in the preparation of these reports is whether additional issues that are not formally included in the scope of either the ASTM E1527-13 or the ASTM E1527-21 standard should be addressed. For example, as noted in an appendix to the E1527-21 standard, petroleum products are within the scope of the practice “because they are of concern with respect to commercial real estate, and current custom and usage is to include an inquiry into the [past or present] presence of petroleum products when doing an environmental site assessment of commercial real estate.” That is so even though petroleum products generally do not lead to liability under CERCLA.

The non-scope issues appendix to the ASTM E1527-21 standard also addresses “substances not defined as hazardous substances” and does a good job addressing why a user of an ASTM-compliant report should at least consider whether to include certain emerging contaminants such as per- and polyfluoroalkyl substances, also known as PFAS, within its scope. The point is to think about whether to evaluate potential environmental liability for PFAS on a case-by-case basis in light of state law considerations, even though PFAS compounds have not yet been designated “hazardous substances” under CERCLA.

EPA’s recent rule-making activities have not provided clear guidance for potential purchasers of contaminated property regarding which ASTM standard should be used in preparing environmental site assessment reports that comply with EPA’s AAI regulations. At the moment, what seems to make the most sense is to have these reports prepared so that they comply with the ASTM E1527-13 standard and to consider whether to comply with the E1527-21 standard in addition. The user should also carefully evaluate whether certain considerations, such as potential PFAS contamination, should be included within the scope of the report.

2022 Goulston & Storrs PC.