Tag: legal

Lessons We All Should Learn from the Great Salt Lake Crisis

Those of us on the east coast have heard that the Great Salt Lake has receded to the verge of a public health crisis, including because toxins in the sediment that have been underwater for millennia may soon may soon be widely spread air pollutants.   Today I had the opportunity to visit the rapidly shrinking Great Salt Lake and hear from leading experts about what might be done about it.  Much of what I heard surprised me.  More importantly, some of the lessons learned in Utah are generally applicable to our still evolving response to our global climate emergency.

How much has the Great Salt Lake shrunk?   In the modern era it has lost 73 percent of its water and 60 percent of its area.  Of the 120 saline lakes on the planet, 100 are in decline and on average they have shrunk, on average, 60 percent.  That means that as bad as things are at the Great Salt Lake, there are many other places where things are worse.

Contrary to popular belief, while a warming climate is a contributing cause of this decline, it is not the main cause.  The main cause is that water has been diverted from the historic tributaries to the Great Salt Lake for other uses, primarily agriculture which is responsible for 72 percent of Utah’s water consumption.  Those diversions have been occurring since Brigham Young arrived in Utah in the 19th century.

Why does the shrinking of the lake matter?  Well, in addition to the public health threat posed to the southwestern United States by the toxins in the sediment, the increased water salinity that comes with the Great Salt Lake being smaller is toxic to the brine shrimp that are essential to the survival of the tens of millions of migratory birds that make the lake home for part of the year on their way to and from other places in North and South America.  The rapidly receding waters also pose a clear and present danger to other economically important activities including mineral extraction and tourism.  One example of the broad range of negative impacts of the shrinking lake — snow in the mountains has been proven to melt faster as a result of the deposition of dust from the lake, shortening Utah’s economically important ski season.

I was of the prior impression that people in Utah didn’t appreciate the magnitude of the crisis at hand.  I was wrong.  The fact is that the Utah Legislature has taken numerous actions in recent years to reverse more than a century of momentum in the wrong direction.  As a result of these actions there is cause for real optimism that the level of the Great Salt Lake will continue to rise though it will take decades to make lasting improvements.

And that brings me to the lessons of general applicability that I learned.   As one local water law expert said, there is no silver bullet to end the Great Salt Lake crisis but there is silver buckshot.   There is no one law that can be passed or one lawsuit that will be litigated that will immediately void the water rights that have resulted in Utah (and all of the other western states) using much more water than can sustainably be used.  What the people of Utah have learned is that many interventions are necessary, all at the same time.  And they’re implementing that lesson in real time.    We all might consider whether we’re acting with the same ingenuity and urgency respecting our environmental challenges.

And I heard another important thing for the second time in a week.  The biggest challenge in repairing the Great Salt Lake isn’t identifying what needs to be done.  It is getting people to own what it will take to get water into the Great Salt Lake and why that matters.   The necessary messaging is complicated because there is no one size fits all message and even if you’re doing it correctly, it isn’t immediately effective.  I heard The Nature Conservancy’s Chief Scientist, Dr. Katherine Hayhoe, say something similar about decarbonization and resilience when she was in Boston last week.

The Great Salt Lake crisis became too big for the people of Utah to ignore.  But their multifaceted approach to the crisis is impressive and left me wondering what we on the east coast might be able to do about our much different but equally serious environmental challenges, like the need to more quickly build renewable energy infrastructure and improve our resilience to GHG supercharged storm waters, if we acted with the same urgency.

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
Article by by Jeffrey R. Porter of Mintz
For more articles on the environment, visit the NLR Environmental, Energy & Resources section.

EPA Ramps Up Climate Enforcement

Facilities operating across the country need to be prepared for increased climate-driven enforcement at all levels of federal government—especially at the U.S. Environmental Protection Agency (EPA). With EPA’s Climate Enforcement and Compliance Strategy announcement last week, the Agency has gone all-in on enforcement and compliance programs “to address climate change, wherever appropriate, in every matter within their jurisdiction.” This initiative is consistent with President Biden’s Executive Order 14008, which calls for a government-wide approach to tackling the climate crisis. The strategy also underscores the Agency’s announcement of its first-ever National Enforcement and Compliance Initiative (NECI) on climate change, which targets, among others, methane emissions at oil and gas facilities and landfills, as well as illegal importation of hydrofluorocarbons (HFCs). Companies with exposure to high-Greenhouse Gas (GHG) emissions and related climate risks, both in the Clean Air Act (CAA) and non-CAA context, should be on notice of increased scrutiny moving forward, including climate-focused auditing and inspections by the Agency and GHG-driven injunctive relief.

In the wake of EPA’s announcement of this new enforcement and compliance strategy, watch for the following developments:

  • EPA will increasingly prioritize enforcement and compliance actions to mitigate climate change, including further scrutiny of high-GHG emitters through information requests, inspections, and formal enforcement. Oil and gas facilities and landfills have been specifically targeted, but any facility with high GHG emissions should expect greater enforcement scrutiny.
  • Enforcement demands will likely include higher penalties, compared to other non-GHG-driven cases, more GHG-related injunctive relief, as well as more climate adaptation and resilience requirements. This relief could include more fence-line monitoring or flare gas reductions or recovery, among other priorities.
  • Climate-focused injunctive relief measures will not be limited to CAA. Expect a renewed emphasis on green remediation technologies at Superfund and Resource Conservation and Recovery Act corrective action sites, as well as a push for green infrastructure, resiliency planning, and stormwater management enhancements in Clean Water Act settlements.
  • Plan for EPA to scrutinize GHG emissions reports more closely. Carefully evaluate these submissions to ensure consistency with reporting regulations.
  • EPA will be interested in Supplemental Environmental Projects that reduce GHGs.  Consider clean and renewable energy projects or other GHG mitigation projects as part of any strategy to resolve an enforcement case, particularly if the penalty demand is large.

Facilities located in Environmental Justice (EJ) communities should particularly expect additional climate-related scrutiny, as EPA has indicated that “[t]hese efforts are particularly necessary in overburdened and marginalized communities that are on the frontlines of the climate crisis.” Facilities will need to engage in more extensive consultation with local communities to evaluate remedy selection, including any climate adaptation efforts, as well as more protracted enforcement negotiations to evaluate community-focused injunctive relief (i.e., climate risk reporting, additional community engagement, etc.).

Finally, be prepared to respond to these issues quickly, including the Biden Administration’s broader EPA enforcement agenda, which is expected to increase enforcement dramatically over the coming months and years. Apart from EPA, broader scrutiny of corporate climate reporting will become more common as the Securities and Exchange Commission looks to finalize its proposed Climate Risk Disclosure Rule, requiring public companies to disclose climate-related risks and emissions data, among other requirements. Facilities should review publicly available information and emissions reporting for consistency and accuracy.

© 2023 Beveridge & Diamond PC
Article by: Andrew C. Silton , Allyn L. Stern , Barbara M.R. Marvin of Beveridge & Diamond PC 
For more articles on the EPA, visit the NLR Environmental, Energy and Resources section.

European Commission Aims to Tackle Greenwashing in Latest Proposal

On March 22, the European Commission unveiled a proposal, the Green Claims Directive (Proposal), aimed at combating greenwashing and misleading environmental claims. By virtue of the Proposal, the EC is attempting to implement measures designed to provide “reliable, comparable and verifiable information” to consumers, with the overall high-level goal to create a level playing field in the EU, wherein companies that make a genuine effort to improve their environmental sustainability can be easily recognized and rewarded by consumers. The Proposal follows a 2020 sweep that found nearly half of environmental claims examined in the EU may be false or deceptive. Following the ordinary legislative procedure, the Proposal will now be subject to the approval of the European Parliament and the Council. There is no set date for entry into force at this time.

The Proposal complements a March 2022 proposal to amend the Consumer Rights Directive to provide consumers with information on products’ durability and repairability, as well as to amend the Unfair Commercial Practices Directive by, among other things, banning “generic, vague environmental claims” and “displaying a voluntary sustainability label which was not based on a third-party verification scheme or established by public authorities.” The Proposal builds on these measures to provide “more specific requirements on unregulated claims, be it for specific product groups, specific sectors or for specific environmental impacts or aspects.” It would require companies that make “green claims to respect minimum standards on how they substantiate and communicate those claims.” Businesses based outside the EU that make environmental claims directed at EU consumers will also have to respect the requirements set out in the Proposal. The criteria target explicit claims, such as “T-shirt made of recycled plastic bottles” and “packaging made of 30% recycled plastic.”

Pursuant to Article 3 of the Proposal, “environmental claims shall be based on an assessment that meets the selected minimum criteria to prevent claims from being misleading,” including, among other things, that the claim “relies on recognised scientific evidence and state of the art technical knowledge,” considers “all significant aspects and impacts to assess the performance,” demonstrates whether the claim is accurate for the whole product or only parts of it, provides information on whether the product performs better than “common practice,” identifies any negative impacts resulting from positive product achievements, and reports greenhouse gas offsets.

Article 4 of the Proposal outlines requirements for comparative claims related to environmental impacts, including disclosure of equivalent data for assessments, use of consistent assumptions for comparisons and use of data sourced in an equivalent manner. The level of substantiation needed will vary based on the type of claim, but all assessments should consider the product’s life-cycle to identify relevant impacts.

Pursuant to Article 10, all environmental claims and labels must be verified and certified by a third-party verifier before being used in commercial communications. An officially accredited body will carry out the verification process and issue a certificate of conformity, which will be recognized across the EU and shared among Member States via the Internal Market Information System. The verifier is required to be an officially accredited, independent body with the necessary expertise, equipment, and infrastructure to carry out the verifications and maintain professional secrecy.

The Proposal is part of a broader trend of governmental regulators, self-regulatory organizations, and standard setters across industries adopting a more formalized approach toward greenwashing. For example, as we recently reported, the UK’s Advertising Standards Authority (ASA) published rules on making carbon neutral and net-zero claims. Instances of enforcement actions over greenwashing allegations have also been on the rise. The Securities and Exchange Board of India recently launched a consultation paper seeking public comment on rules to prevent greenwashing by ESG investment funds, and the European Council and the European Parliament reached an agreement regarding European Green Bonds Standards aimed at, among other things, avoiding greenwashing.

Article By Sukhvir Basran and Rachel Rodman of Cadwalader, Wickersham & Taft LLP

Click here to visit the National Law Review for more environmental law news.

© Copyright 2023 Cadwalader, Wickersham & Taft LLP

Clop Claims Zero-Day Attacks Against 130 Organizations

Russia-linked ransomware gang Clop has claimed that it has attacked over 130 organizations since late January, using a zero-day vulnerability in the GoAnywhere MFT secure file transfer tool, and was successful in stealing data from those organizations. The vulnerability is CVE-2023-0669, which allows attackers to execute remote code execution.

The manufacturer of GoAnywhere MFT notified customers of the vulnerability on February 1, 2023, and issued a patch for the vulnerability on February 7, 2023.

HC3 issued an alert on February 22, 2023, warning the health care sector about Clop targeting healthcare organizations and recommended:

  • Educate and train staff to reduce the risk of social engineering attacks via email and network access.
  • Assess enterprise risk against all potential vulnerabilities and prioritize implementing the security plan with the necessary budget, staff, and tools.
  • Develop a cybersecurity roadmap that everyone in the healthcare organization understands.

Security professionals are recommending that information technology professionals update machines to the latest GoAnywhere version and “stop exposing port 8000 (the internet location of the GoAnywhere MFT admin panel).”

Article By Linn F. Freedman of Robinson & Cole LLP

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

Copyright © 2023 Robinson & Cole LLP. All rights reserved.

The EU’s New Green Claims Directive – It’s Not Easy Being Green

Highlights

  • On March 22, 2023, the European Commission proposed the Green Claims Directive, which is intended to make green claims reliable, comparable and verifiable across the EU and protect consumers from greenwashing
  • Adding to the momentum generated by other EU green initiatives, this directive could be the catalyst that also spurs the U.S. to approve stronger regulatory enforcement mechanisms to crackdown on greenwashing
  • This proposed directive overlaps the FTC’s request for comments on its Green Guides, including whether the agency should initiate a rulemaking to establish enforceable requirements related to unfair and deceptive environmental claims. The deadline for comments has been extended to April 24, 2023

The European Commission (EC) proposed the Green Claims Directive (GCD) on March 22, 2023, to crack down on greenwashing and prevent businesses from misleading customers about the environmental characteristics of their products and services. This action was in response, at least in part, to a 2020 commission study that found more than 50 percent of green labels made environmental claims that were “vague, misleading or unfounded,” and 40 percent of these claims were “unsubstantiated.”

 

This definitive action by the European Union (EU) comes at a time when the U.S. is also considering options to curb greenwashing and could inspire the U.S. to implement stronger regulatory enforcement mechanisms, including promulgation of new enforceable rules by the Federal Trade Commission (FTC) defining and prohibiting unfair and deceptive environmental claims.

According to the EC, under this proposal, consumers “will have more clarity, stronger reassurance that when something is sold as green, it actually is green, and better quality information to choose environment-friendly products and services.”

Scope of the Green Claims Directive

The EC’s objectives in the proposed GCD are to:

  • Make green claims reliable, comparable and verifiable across the EU
  • Protect consumers from greenwashing
  • Contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
  • Help establish a level playing field when it comes to environmental performance of products

The related proposal for a directive on empowering consumers for the green transition and annex, referenced in the proposed GCD, defines the green claims to be regulated as follows:

“any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.”

The GCD provides minimum requirements for valid, comparable and verifiable information about the environmental impacts of products that make green claims. The proposal sets clear criteria for companies to prove their environmental claims: “As part of the scientific analysis, companies will identify the environmental impacts that are actually relevant to their product, as well as identifying any possible trade-offs to give a full and accurate picture.” Businesses will be required to provide consumers information on the green claim, either with the product or online. The new rule will require verification by independent auditors before claims can be made and put on the market.

The GCD will also regulate environmental labels. The GCD is proposing to establish standard criteria for the more than 230 voluntary sustainability labels used across the EU, which are currently “subject to different levels of robustness, supervision and transparency.” The GCD will require environmental labels to be reliable, transparent, independently verified and regularly reviewed. Under the new proposal, adding an environmental label on products is still voluntary. The EU’s official EU Ecolabel is exempt from the new rules since it already adheres to a third-party verification standard.

Companies based outside the EU that make green claims or utilize environmental labels that target the consumers of the 27 member states also would be required to comply with the GCD. It will be up to member states to set up the substantiation process for products and labels’ green claims using independent and accredited auditors. The GCD has established the following process criteria:

  • Claims must be substantiated with scientific evidence that is widely recognised, identifying the relevant environmental impacts and any trade-offs between them
  • If products or organisations are compared with other products and organisations, these comparisons must be fair and based on equivalent information and data
  • Claims or labels that use aggregate scoring of the product’s overall environmental impact on, for example, biodiversity, climate, water consumption, soil, etc., shall not be permitted, unless set in EU rules
  • Environmental labelling schemes should be solid and reliable, and their proliferation must be controlled. EU level schemes should be encouraged, new public schemes, unless developed at EU level, will not be allowed, and new private schemes are only allowed if they can show higher environmental ambition than existing ones and get a pre-approval
  • Environmental labels must be transparent, verified by a third party, and regularly reviewed

Enforcement of the GCD will take place at the member state level, subject to the proviso in the GCD that “penalties must be ‘effective, proportionate and dissuasive.’” Penalties for violation range from fines to confiscation of revenues and temporary exclusion from public procurement processes and public funding. The directive requires that consumers should be able to bring an action as well.

The EC’s intent is for the GCD to work with the Directive on Empowering the Consumers for the Green Transition, which encourages sustainable consumption by providing understandable information about the environmental impact of products, and identifying the types of claims that are deemed unfair commercial practices. Together these new rules are intended to provide a clear regime for environmental claims and labels. According to the EC, the adoption of this proposed legislation will not only protect consumers and the environment but also give a competitive edge to companies committed to increasing their environmental sustainability.

Initial Public Reaction to the GCD and Next Steps

While some organizations, such as the International Chamber of Commerce, offered support, several interest groups quickly issued public critiques of the proposed GCD. The Sustainable Apparel Coalition asserted that: “The Directive does not mandate a standardized and clearly defined framework based on scientific foundations and fails to provide the legal certainty for companies and clarity to consumers.”

ECOS lamented that “After months of intense lobbying, what could have been legislation contributing to providing reliable environmental information to consumers was substantially watered down,” and added that “In order for claims to be robust and comparable, harmonised methodologies at the EU level will be crucial.” Carbon Market Watch was disappointed that “The draft directive fails to outlaw vague and disingenuous terms like ‘carbon neutrality’, which are a favoured marketing strategy for companies seeking to give their image a green makeover while continuing to pollute with impunity.”

The EC’s proposal will now go to the European Parliament and Council for consideration. This process usually takes about 18 months, during which there will be a public consultation process that will solicit comments, and amendments may be introduced. If the GCD is approved, each of the 27 member states will have 18 months after entry of the GCD to adopt national laws, and those laws will become effective six months after that. As a result, there is a reasonably good prospect that there will be variants in the final laws enacted.

Will the GCD Influence the U.S.’s Approach to Regulation of Greenwashing?

The timing and scope of the GCD is of no small interest in the U.S., where regulation of greenwashing has been ramping up as well. In May 2022, the Securities and Exchange Commission (SEC) issued the proposed Names Rule and ESG Disclosure Rule targeting greenwashing in the naming and purpose of claimed ESG funds. The SEC is expected to take final action on the Names Rule in April 2023.

Additionally, as part of a review process that occurs every 10 years, the FTC is receiving comments on its Green Guides for the Use of Environmental Claims, which also target greenwashing. However, the Green Guides are just that – guides that do not currently have the force of law that are used to help interpret what is “unfair and deceptive.”

It is particularly noteworthy that the FTC has asked the public to comment, for the first time, on whether the agency should initiate a rulemaking under the FTC Act to establish independently enforceable requirements related to unfair and deceptive environmental claims. If the FTC promulgates such a rule, it will have new enforcement authority to impose substantial penalties.

The deadline for comments on the Green Guides was recently extended to April 24, 2023. It is anticipated that there will be a substantial number of comments and it will take some time for the FTC to digest them. It will be interesting to watch the process unfold as the GCD moves toward finalization and the FTC decides whether to commence rulemaking in connection with its Green Guide updates. Once again there is a reasonable prospect that the European initiatives and momentum on green matters, including the GCD, could be a catalyst for the US to step up as well – in this case to implement stronger regulatory enforcement mechanisms to crackdown on greenwashing.

Article By Bruce White of Barnes & Thornburg LLP

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

© 2023 BARNES & THORNBURG LLP

Consumer Fraud PFAS Lawsuits Update: Two Cases Dismissed

On several instances, we have written regarding consumer fraud PFAS class action lawsuits filed in several states. The number of product types targeted for these lawsuits are growing and diverse in terms of the industries targeted. While there has been at least one significant settlement in these lawsuits to date, recently two of the lawsuits that we previously reported on related to PFAS consumer fraud allegations were dismissed by separate courts.

While it is too early to say that these dismissals are a preview of a coming trend in the litigation, the rulings at least provide companies with assurance that there are defenses available in these cases. Nevertheless, with the number of consumer fraud lawsuits likely to continue increasing for the time being, consumer goods industries, insurers, and investment companies interested in the consumer goods vertical must pay careful attention to these lawsuits.

Consumer Fraud PFAS Lawsuits – Overview

The consumer fraud PFAS lawsuits filed to date follow a very similar pattern: various plaintiffs bringing suit on behalf of a proposed class allege that companies market consumer goods as safe, healthy, environmentally friendly, etc., or that the companies themselves market their corporate practices as such, yet it is allegedly discovered that certain products marketed with these buzzwords contain PFAS. The lawsuits allege that since certain PFAS may be harmful to human health and PFAS are biopersistent (and therefore environmentally unfriendly), the companies making the good engaged in fraud against consumers to entice them to purchase the products in question.

In the Complaints, plaintiffs typically allege the following counts:

  • Violation of state consumer protection laws and the federal Magnuson-Moss Warranty Act
  • Violations of various state consumer protection laws
  • Breach of warranty
  • Fraud
  • Constructive fraud
  • Unjust enrichment

The plaintiffs seek certification of nationwide class action lawsuits, with a subclass defined as consumers in the state in which the lawsuits are filed. In addition, the lawsuits seeks damages, fees, costs, and a jury trial. Representative industries and cases that have recently been filed include:

  • Cosmetics industry:
    • Brown v. Cover Girl, New York (April 1, 2022)
    • Anderson v. Almay, New York (April 1, 2022)
    • Rebecca Vega v. L’Oreal, New Jersey (April 8, 2022)
    • Spindel v. Burt’s Bees, California (March 25, 2022)
    • Hicks and Vargas v. L’Oreal, New York (March 9, 2022)
    • Davenport v. L’Oreal, California (February 22, 2022)
  • Food packaging industry:
    • Richburg v. Conagra Brands, Illinois (May 6, 2022)
    • Ruiz v. Conagra Brands, Illinois (May 6, 2022)
    • Hamman v. Cava Group, California (April 27, 2022)
    • Azman Hussain v. Burger King, California (April 11, 2022)
    • Little v. NatureStar, California (April 8, 2022)
    • Larry Clark v. McDonald’s, Illinois (March 28, 2022)
  • Food and drink products:
    • Bedson v. Biosteel, New York (January 27, 2023)
    • Lorenz v. Coca-Cola, New York (December 28, 2022)
    • Toribio v. Kraft Heinz, Illinois (November 29, 2022)
  • Apparel products:
    • Krakauer v. REI, Washington (October 28, 2022)
  • Hygiene products:
    • Esquibel v. Colgate-Palmolive Co., New York (January 27, 2023)
    • Dalewitz v. Proctor & Gamble, New York (August 26, 2022)
  • Feminine hygiene products:
    • Gemma Rivera v. Knix Wear Inc., California (April 4, 2022)
    • Blenis v. Thinx, Inc., Massachusetts (June 18, 2021)
    • Destini Canan v. Thinx Inc., California (November 12, 2020)

Recent Rulings In Consumer Fraud PFAS Cases

In California, the Yeraldinne Solis v. CoverGirl Cosmetics et al. case made allegations that cosmetics were marketed as safe and sustainable, yet were found to contain PFAS. The defendants in the lawsuit filed a Motion to Dismiss, arguing in relevant part that the plaintiff had no standing to file the lawsuit because she did not sufficiently allege that she suffered any economic harm from purchasing the product. The plaintiff put forth two theories to counter this argument: (1) the “benefit of the bargain” theory, under which the plaintiff alleged that she bargained for a product that was “safe”, but received the opposite. The court dismissed this argument because the product packaging did not market the product as safe, and the ingredient list explicitly named the type of PFAS found in testing; and (2) an overpayment theory, under which plaintiff alleged that if she knew the product contained PFAS, she would not have paid as much for it as she did. The Court dismissed this argument because the product packaging specifically listed the type of PFAS at issue in the case.

In Illinois, the Richburg v. Conagra Brands, Inc. alleged that popcorn packaging was marketed as containing “only real ingredients” and ingredients from “natural sources”, yet the popcorn contained PFAS (likely from the packaging itself), which was allegedly false and misleading to consumers. The defendant moved to dismiss the lawsuit on several grounds and the Court found in defendant’s favor on one important ground. The Court held that the statements on the popcorn packaging would not mislead an ordinary and reasonable consumer because a consumer would understand “ingredients” to mean those items that are required to be disclosed by the FDA and not materials that may have migrated to the food from the product packaging. In fact, the Court ruled that the FDA “exempts substances migrating to food from equipment or packaging;” and those “do not need to be included in the ingredients list.”  The defendant argued that reasonable consumers would not consider PFAS to be an “ingredient” under this regime.  In other words, whether or not PFAS migrated into the popcorn, the representations that the popcorn contained “only real ingredients” and “100% ingredients from natural sources” were “correct as a matter of law.” The court dismissed plaintiffs claims on this basis.

Conclusion

Several major companies now find themselves embroiled in litigation focused on PFAS false advertising, consumer protection violations, and deceptive statements made in marketing and ESG reports. The lawsuits may well serve as test cases for plaintiffs’ bar to determine whether similar lawsuits will be successful in any (or all) of the fifty states in this country. Companies must consider the 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 consumer 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.

While the above rulings are encouraging for companies facing consumer fraud PFAS lawsuits, it is far too early to tell if the trend will continue nationally.  Different courts apply legal standards differently and these cases are very fact specific, which could lead to differing results.

It is of the utmost importance that businesses along the whole supply chain in the consumer products 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 consumer products 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.

©2023 CMBG3 Law, LLC. All rights reserved.

Inflation’s Effect on Taxes – The Good and the Bad

Many federal tax provisions are adjusted for inflation annually, but not all. Rising inflation may result in lower tax bills for many taxpayers in 2023. Unfortunately, the impacts of inflation on taxpayers will not lower their 2022 tax bills even though inflation is at the highest level in the past 40 years.

The standard deduction is indexed for inflation. In 2023, for married couples filing joint tax returns, the standard deduction increased by $1,800 to $27,700; and for single taxpayers the standard deduction increased by $900 to $13,850.

The tax rates for individual tax filers have not changed (with the highest tax rate remaining at 37%), but the income levels have increased between the brackets. For example, in 2023, the 32% tax bracket starts at $364,200 for married couples filing jointly (up from $340,100 in 2022); and the 35% bracket for married couples filing jointly starts at $462,500 (up from $331,900 in 2022).

Estates of decedents who die in 2023 will have an estate tax exemption of $12,920,000 (up from $12,060,000 in 2022). The gift tax exclusions also increased to the same amounts and the annual gift exclusion increased to $17,000 per donee, which allows a married couple to gift $34,000 using their annual exclusion with no limit on the number of donees.

Social security recipients will enjoy an 8.7% increase in their monthly benefits in 2023 compared to 2022.

Other increases, as a result of rising inflation, include higher maximum contributions to retirement plans, health savings accounts and flexible spending accounts.

Inflation will impact taxpayers, employees and employers negatively as well. Employees, employers and self-employed individuals will be subject to social security taxes on earnings of $160,200 (up from $147,000 in 2022).

The limitation on itemized deduction for state and local tax has not increased, although state and local taxes have generally increased and the personal exemption continues to remain at zero. Finally, there has been no reduction in the long-term capital gains tax rate or increase in the deduction for capital losses which remains limited to $3,000 per year in excess of capital gains.

Article By Edwin I. Josephson of Chuhak & Tecson, P.C.

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

© 2023 Chuhak & Tecson P.C.

Sexual Harassment Prevention Training Deadline Approaches for Chicago Employers

As a reminder to employers in Chicago, anti-sexual harassment training is required by Chicago’s Human Rights Ordinance and must be completed by July 1, 2023.  This requirement applies to all Chicago employers, regardless of size or industry.

The training consists of one (1) hour of anti-sexual harassment training for all non-supervisory employees and two (2) hours of anti-sexual harassment training for supervisory employees.  Regardless of supervisory status, all employees must also undergo one (1) hour of bystander training.  Employers must provide training on an annual basis.  Additional information about training requirements can be found here. Employers who fail to comply may be subject to penalties.

Article By Audrey H. Shinn of Vedder Price

© 2023 Vedder Price

Privacy Tip #358 – Bank Failures Give Hackers New Strategy for Attacks

Hackers are always looking for the next opportunity to launch attacks against unsuspecting victims. According to Cybersecurity Dive, researchers at Proofpoint recently observed “a phishing campaign designed to exploit the banking crisis with messages impersonating several cryptocurrencies.”

According to Cybersecurity Dive, cybersecurity firm Arctic Wolf has observed “an uptick in newly registered domains related to SVB since federal regulators took over the bank’s deposits…” and “expects some of those domains to serve as a hub for phishing attacks.”

This is the modus operandi of hackers. They use times of crises, when victims are vulnerable, to launch attacks. Phishing campaigns continue to be one of the top risks to organizations, and following the recent bank failures, everyone should be extra vigilant of urgent financial requests and emails spoofing financial institutions, and take additional measures, through multiple levels of authorization, when conducting financial transactions.

We anticipate increased activity following these recent financial failures attacking individuals and organizations. Communicating the increased risk to employees may be worth consideration.

Article By Linn F. Freedman of Robinson & Cole LLP

For more communications, media, and internet legal news, click here to visit the National Law Review.

Copyright © 2023 Robinson & Cole LLP. All rights reserved.

To AI or Not to AI: U.S. Copyright Office Clarifies Options

The U.S. Copyright Office has weighed in with formal guidance on the copyrightability of works whose generation included the use of artificial intelligence (AI) tools. The good news for technology-oriented human creative types: using AI doesn’t automatically disqualify your work from copyright protection. The bad news for independent-minded AI’s: you still don’t qualify for copyright protection in the United States.

On March 16, 2023, the Copyright Office issued a statement of policy (“Policy”) to clarify its practices for examining and registering works that contain material generated by the use of AI and how copyright law’s human authorship requirements will be applied when AI was used. This Policy is not itself legally binding or a guarantee of a particular outcome, but many copyright applicants may breathe a sigh of relief that the Copyright Office has formally embraced AI-assisted human creativity.

The Policy is just the latest step in an ongoing debate over the copyrightability of machine-assisted products of human creativity. Nearly 150 years ago, the Supreme Court ruled at photographs are copyrightable. See Burrow-Giles Lithographic Company v. Sarony, 111 U.S. 53 (1884). The case involved a photographer’s claim against a lithographer for 85,000 unauthorized copies of a photograph of Oscar Wilde. The photo, Sarony’s “Oscar Wilde No. 18,” is shown below:

Sarony’s “Oscar Wilde No. 18"

The argument against copyright protection was that a photograph is “a reproduction, on paper, of the exact features of some natural object or of some person” and is therefore not a product of human creativity. Id. at 56. The Supreme Court disagreed, ruling that there was sufficient human creativity involved in making the photo, including posing the subject, evoking the desired expression, arranging the clothing and setting, and managing the lighting.

In the mid-1960’s, the Copyright Office rejected a musical composition, Push Button Bertha, that was created by a computer, reasoning that it lacked the “traditional elements of authorship” as they were not created by a human.

In 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that Naruto, a crested macaque (represented by a group of friendly humans), lacked standing under the Copyright Act to hold a copyright in the “monkey selfie” case. See Naruto v. Slater, 888 F.3d 418 (9th Cir. 2018). The “monkey selfie” is below:

Monkey Selfie

In February 2022, the Copyright Office rejected a registration (filed by interested humans) for a visual image titled “A Recent Entrance to Paradise,” generated by DABUS, the AI whose claimed fractal-based inventions are the subject of patent applications around the world. DABUS’ image is below:

“A Recent Entrance to Paradise”

Litigation over this rejected application remains pending.

And last month, the Copyright Office ruled that a graphic novel consisting of human-authored text and images generated using the AI tool Midjourney could, as a whole, be copyrighted, but that the images, standing alone, could not. See U.S. Copyright Office, Cancellation Decision re: Zarya of the Dawn (VAu001480196) at 2 (Feb. 21, 2023).

The Copyright Office’s issuing the Policy was necessitated by the rapid and remarkable improvements in generative AI tools over even the past several months. In December 2022, generative AI tool Dall-E generated the following images in response to nothing more than the prompt, “portrait of a musician with a hat in the style of Rembrandt”:

Four portraits generated by AI tool Dall-E from the prompt, "portrait of a musician with a hat in the style of Rembrandt."

If these were human-generated paintings, or even photographs, there is no doubt that they would be copyrightable. But given that all four images were generated in mere seconds, with a single, general prompt from a human user, do they meet the Copyright Office’s criteria for copyrightability? The answer, now, is a clear “no” under the Policy.

However, the Policy opens the door to registering AI-assisted human creativity. The toggle points will be:

“…whether the ‘work’ is basically one of human authorship, with the computer [or other device] merely being an assisting instrument, or whether the traditional elements of authorship in the work (literary, artistic, or musical expression or elements of selection, arrangement, etc.) were actually conceived and executed not by man but by a machine.” 

In the case of works containing AI-generated material, the Office will consider whether the AI contributions are the result of “mechanical reproduction” or instead of an author’s “own original mental conception, to which [the author] gave visible form.” 

The answer will depend on the circumstances, particularly how the AI tool operates and how it was used to create the final work. This will necessarily be a case-by-case inquiry.” 

See Policy (citations omitted).

Machine-produced authorship alone will continue not to be registerable in the United States, but human selection and arrangement of AI-produced content could lead to a different result according to the Policy. The Policy provides select examples to help guide registrants, who are encouraged to study them carefully. The Policy, combined with near future determinations by the Copyright Office, will be critical to watch in terms of increasing likelihood a registration application will be granted as the Copyright Office continues to assess the impacts of new technology on the creative process. AI tools should not all be viewed as the “same” or fungible. The type of AI and how it is used will be specifically considered by the Copyright Office.

In the short term, the Policy provides some practical guidance to applicants on how to describe the role of AI in a new copyright application, as well as how to amend a prior application in that regard if needed. While some may view the Policy as “new” ground for the Copyright Office, it is consistent with the Copyright Office’s long-standing efforts to protect the fruits of human creativity even if the backdrop (AI technologies) may be “new.”

As a closing note, it bears observing that copyright law in the United Kingdom does permit limited copyright protection for computer-generated works – and has done so since 1988. Even under the U.K. law, substantial questions remain; the author of a computer-generated work is considered to be “the person by whom the arrangements necessary for the creation of the work are undertaken.” See Copyright, Designs and Patents Act (1988) §§ 9(3), 12(7) and 178. In the case of images generated by a consumer’s interaction with a generative AI tool, would that be the consumer or the generative AI provider?

Article By Nadia G. Aram and Dr. Christian E. Mammen of Womble Bond Dickinson (US) LLP

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