Implication of TSCA Amendments on US Workplace and Consumer Safety Regulation

How US EPA assesses and regulates chemicals under the amended Toxic Substances Control Act has a number of implications for workplace and consumer safety regulation. In particular, chemicals regulated under other environmental statutes may bear on US EPA’s plans in this arena. US EPA has not regulated a chemical under TSCA Section 6, which provides for regulation of existing as opposed to new chemicals, since 1989, when it adopted a ban on asbestos which was subsequently overturned by a federal Court of Appeals. This 27-year hiatus appears to be coming to an end, as US EPA has indicated that it expects to propose three such rules by late 2016. In a recent article published in the Bloomberg BNA Chemical Regulation Reporter, Squire Patton Boggs’ partner W. Caffey Norman provides insights on this regulatory inter-relationships as US EPA begins moving forward in the new legal landscape following enactment of the Frank R. Lautenberg Chemical Safety for the 21st Century Act on June 22, 2016.

 

UK Chemicals Regulation Post-Brexit

The British exit from the European Union (Brexit) could significantly impact chemical companies operating within the United Kingdom (UK), depending on the regulatory decisions made by the government.  Post-Brexit, REACH, the European Union’s chemicals regulatory scheme will no longer apply to the UK.  Upon exiting REACH, UK companies exporting to Europe could face substantial extra costs, as they would have to go through the registration process all over again. Squire Patton Boggs’ partner, David Gordon, foreshadows the potential options that the UK has in developing and implementing chemicals regulation post-Brexit in a this ICIS Chemical Business article.

When to Consider “Non-Scope Considerations” in Environmental Due Diligence

Performing thorough environmental due diligence for commercial and industrial property acquisitions requires consideration of diverse risks to a prospective purchaser. Such diligence generally includes a Phase I environmental site assessment performed under ASTM Standard Practice E1527-13 (ASTM E1527-13), which is designed to investigate the possibility of hazardous substance or petroleum product releases at a commercial property—the presence of which can serve as a basis for strict, joint-and-several liability to current and past property owners under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

While CERCLA liability is a primary concern to any prospective purchaser of commercial and industrial property, there are a host of other issues that may create liability ranging from exposure risks from building materials and naturally-occurring substances (both exempt from CERCLA), to regulatory non-compliance, to potential tort liability for hazardous conditions. ASTM E1527-13 identifies these issues as “non-scope considerations” that may create a “business environmental risk”—a term the ASTM standard defines as “a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate.”

ASTM E1527-13 outlines a non-exhaustive list of “non-scope considerations” that includes: asbestos-containing building materials, biological agents, cultural and historical resources, ecological resources, endangered species, health and safety, indoor air quality (unrelated to hazardous substances or petroleum products, which would be part of the standard Phase I assessment), industrial hygiene, lead-based paint, lead in drinking water, mold, radon, regulatory compliance, and wetlands.  The environmental professional is not required to investigate “non-scope considerations” in a standard Phase I assessment, but many of these issues may be investigated as part of the Phase I upon request and for an additional cost.

Whether to investigate these issues can depend on a wide range of factors. For example, if the geographical setting contains hydrological features, a prospective purchaser may need to consider a wetlands investigation and/or jurisdictional determination.  Also, radon may present a higher risk depending on its location.  Radon levels on average are higher in the northern United States.  US EPA classifies radon risks within three zones on a per-county basis. Consequently, if your project is located within a “Zone 1” area, there is an increased likelihood that radon levels may exceed 4.0 pCi/L—the action level set by US EPA that requires mitigation.

Additionally, investigation of “non-scope considerations” may be required to receive federal financing.  The US Department of Housing and Urban Development (HUD) requires that many of the above issues be addressed in the environmental report prepared by lenders to satisfy National Environmental Policy Act requirements.  In fact, HUD expands upon ASTM E1527-13’s list to include a variety of other issues, such as floodplain management, noise analysis, explosive/flammable hazards, coastal barrier resources, coastal zone management, sole source aquifers, airport clear zones, and environmental justice considerations.  State loan programs may impose similar considerations.

For issues such as asbestos and lead-based paint, federal or state regulations may require more than non-invasive investigation (as performed under a Phase I assessment), and instead require sampling and testing to confirm the presence of materials that may be impacted by planned development.   Where materials are confirmed, abatement or encapsulation by a licensed professional may be necessary to address releases, and development of a management plan may be necessary for materials that remain on-site to reduce exposure risks.

Patchwork state regulation may also result in substantially varied requirements. For example, as to investigation of radon risks, for the many states that “default” to HUD’s Radon Policy, a baseline of 25% of randomly selected ground level units in multi-family developments are to be tested. However, Ohio mandates substantially more investigation, requiring testing of 100% of ground level units and 10% of upper level dwelling units.

ASTM E1527-13 notes that the decision of whether to investigate “non-scope considerations” is “within the discretion of the user based on its own risk tolerance … [and] … the particular requirements of a specific transaction.” This evaluation can be fact-intensive, complex and requires a thorough understanding of the relevant property, its improvements and surroundings, the scope of any planned development, and applicable legal requirements. Discovering late in a project that what was once thought to be little more than a “checkbox” issue will demand considerably more effort to address can fundamentally undermine a project’s goals, creating costly delays for retroactive investigation and inviting regulatory scrutiny.

Conversely, early strategic cooperation between project principals, environmental consultants and legal counsel can identify strategies to minimize impacts to time and budget while ensuring any relevant obligations are managed responsibly. Even a small investment up front can yield significant rewards down the line and ensure that project goals are met.

Supreme Court of Western Australia Rules that State Environmental Policies are Not ‘Relevant Considerations’ when Making an Environmental Impact Assessment

The port City of Fremantle, now considered by many as part of greater Metropolitan Perth, has been home to Fremantle Port since the turn of the 19th Century. For more than a century, 90% of Western Australia’s imports and 30% of its exports have moved through the port.

In 2014, during their first budget, the Abbott Federal Government allocated federal funding supplemented by state funding to upgrade and expand Roe Highway, in order to improve access to and from Fremantle for heavy vehicles transporting freight. Since announcing the election promise, the first stage of the project (known as ‘Roe 8’) has been shrouded in controversy. The arguments opposing the project are many and varied, spanning aboriginal heritage issues, to the compulsory acquisition of residential land. One point of interest for environmental lawyers, however, is the decision this July of the Court of Appeal of Western Australia to overturn a finding that the Environmental Protection Authority (EPA)’s environmental impact assessment of the project was invalid. Continue Reading

US Congress Considers Law That Would Overturn Chevron Deference

Earlier this year, Senate and House Republicans introduced the “Separation of Powers Restoration Act of 2016.”  On July 12, 2016, the House passed the bill by a vote of 240-171, largely along party lines.

The legislation would fundamentally alter a cornerstone of administrative law: Chevron deference.  Chevron deference describes a doctrine articulated by a unanimous US Supreme Court in its 1984 decision, Chevron USA, Inc. v. NRDC.  As the name suggests, Chevron deference requires courts to accept an agency’s reasonable interpretation of the ambiguous terms of a statute that the agency administers.  The Court later extended that rationale to require that courts also defer to an agency’s interpretation of its own regulations, a doctrine commonly referred to as Auer deference.

The rationale behind such deference is that agencies–not courts–are in the best position to implement the complex technical regulatory schemes that agencies are tasked by Congress with implementing.  Judges, in contrast, are not (normally) experts in technical fields, and are not part of either “political” branch of the Government. Practically, then, Chevron deference (and Auer deference) permit agencies to change their interpretations of ambiguous provisions in response to changing technological, social, or political circumstances.

The Separation of Powers Restoration Act of 2016 would amend the Administrative Procedure Act to require that courts decide “de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules.”  Instead of deferring to agency interpretation, courts would be tasked with examining de novo (without deference) statutory language and agency rules.  That is, as proposed, the statute would eliminate both Chevron deference and Auer deference–agency decisions about statutes and rules would be subject to de novo review.  This would impact a wide range of agency action because Congress regularly drafts agencies’ mandates broadly, with Chevron deference in mind.  It is unclear how de novo review might work in practice.  But, at a minimum, the legislation would place courts at the center of controversial agency decision-making, and potentially discourage agencies from taking expansive interpretations of their statutory authority.

What Supporters Say 

Utah Senator Mike Lee (R-Utah), one of the bill’s sponsors, argues that the legislation will “restore accountability to the regulatory process” and will “ensure proper judicial review.”  Senator Lee contends:

For many years, the nation has witnessed a steady accumulation of power within administrative agencies.  As a practical matter, agencies’ power to regulate and to adjudicate has supplanted the legislation and judicial review as the primary means by which governance takes place at the federal level.

As James Madison put it in Federalist 47, ‘The accumulation of all power, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may just be pronounced the very definition of tyranny.’  By definition, the accumulation of power within administrative agencies represents a shift away from the constitutional separation of powers and the liberty it protects.

Supporters in the House of Representatives advance a similar argument.  Representative John Ratcliffe (R-Texas) sponsored the legislation in the House because he believes it will “reduce the accumulation of power attained by regulatory agencies by restoring the power of the courts to interpret the law, instead of deferring to the interpretation of federal administrative agencies.” Representative Ratcliff also argues: “We must ensure the integrity of our three co-equal branches of government, and this legislation will stop administrative agencies from taking power the Constitution does not give them.”

In short, supporters argue that the Separation of Powers Restoration Act of 2016 will reinvigorate judicial oversight of agency action, and effectively restore the three branches of government envisioned in the Constitution.

What Opponents Say 

On the other side of the aisle, opponents of the legislation worry that giving life-tenured federal judges veto power over administrative decisions will harm the American public by allowing those judges to second-guess the agencies with specialized knowledge.  Representative John James Conyers, Jr. (D-Michigan), the longest-serving member of Congress, opposes the Separation of Powers Restoration Act of 2016 because he believes it will:

. . . make the already ossified rulemaking process even more time-consuming and costly, threatening the ability of federal regulatory agencies to protect public health and safety.

. . .

By eliminating judicial deference, the bill would effectively empower the courts to make public policy from the bench even though they lack the specialized expertise and democratic accountability that agencies possess, through delegated authority from and oversight by the American people’s elected representatives.

Echoing Representative Conyers’ sentiment, Representative Hank Johnson (D-Georgia) voted against the bill because it “will delay and possibly derail the ability of agencies to safeguard public health and safety.”

What’s Next

The bill must next pass the Senate before it will be put on the President’s desk. The website govtrack.us gives the legislation a 11% chance of being enacted.  According to that website, the bill’s slim odds are based on a host of variables including: (1) the lack of cosponsors from both parties; and (2) the lack of a companion bill sponsored by another party.

Squire Patton Boggs will continue to monitor this legislation and provide updates.

 

 

US District Court Strikes Down BLM Rule for Hydraulic Fracking on Federal and Tribal Land

On June 21, 2016, the US District Court for the District of Wyoming set aside the US Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on federal and Native American lands, finding that BLM lacked Congressional authority to promulgate the regulations.  “Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing,” Judge Skavdahl wrote in the decision. “The BLM’s effort to do so through the fracking rule is in excess of its statutory authority and contrary to law.”

The Court rejected BLM’s assertion that it has “broad authority” to regulate all oil and gas operations on federal and Native American lands pursuant to the Mineral Leasing Act of 1920, the Federal Land Policy and Management Act of 1976, and other public land use and mineral development statutes.  The Court then looked to the Energy Policy Act of 2005, which explicitly removed US EPA’s authority to regulate non-diesel hydraulic fracturing under the Safe Drinking Water Act.  The Court reasoned that:

Having explicitly removed the only source of specific federal agency authority over fracking, it defies common sense for the BLM to argue that Congress intended to allow it to regulate the same activity under a general statute that says nothing about hydraulic fracturing.

The Court’s decision blocks the enforcement of BLM’s rule and leaves the regulation of hydraulic fracturing to the individual states.  However, the Obama administration has already indicated that it is likely to appeal the decision to the Tenth Circuit Court of Appeals:  “We’ll continue to make our case in the courts,” White House spokesman Josh Earnest said at a briefing regarding the Court’s decision. “We believe that we have a strong argument to make about the important role that the federal government can play in ensuring that hydraulic fracturing that’s done on public land doesn’t threaten the drinking water of the people who live in the area.”

Additional reporting by this blog regarding BLM’s final rule is available here and here.

US EPA Issues First Safety Determinations for New Chemicals Under Amended TSCA

On July 22, 2016,  US EPA issued its first safety determinations on premanufacture notices (PMNs) for new chemicals under TSCA as amended by the recently enacted Frank R. Lautenberg Chemical Safety for the 21st Century Act.  US EPA announced the decisions exactly one month after President Obama signed the Lautenberg Act into law on June 22, 2016.

In decisions posted to its website, US EPA determined that four new chemical substances were “not likely to present an unreasonable risk” to health or the environment, the new TSCA standard established by the Lautenberg Act.  The PMNs for all four substances had been submitted to US EPA prior to enactment of the Lautenberg Act, but because US EPA concluded that the Lautenberg Act had “effectively reset” the 90-day review period for all PMNs, the Agency had reviewed the four chemicals further under the new standard.

The specific chemical identity of each chemical is confidential. The generic names of the four chemicals (and their PMN numbers) are:

  • Generic: Fatty Alcohols-dimers, Trimers, Polymers (P-16-0281)
  • Generic: Depolymerized Waste Plastics (P-16-0292)
  • Generic: Propyl Silsequioxanes, Hydrogen-terminated (P-16-301)
  • Generic: Organic Modified Propyl Silsequioxane (P-16-302)

While US EPA appears to have selected non-controversial chemicals for its first safety determinations under the new TSCA review standard, US EPA’s decisions give at least some insight into the Agency’s thinking, including the methodology it will use to review PMNs, the scope of its consideration of the potential effects of a new chemical, and the documentation explaining its decision on a PMN. Continue Reading

New Ohio Law Increases Protections From Lead Contamination in Drinking Water

water-fountainOn June 9, 2016, Governor John Kasich signed House Bill (HB) 512, a multifaceted law that the Governor has said “puts Ohio in front” and makes Ohio “the leader in the country” in dealing with the problem of lead contamination in drinking water.  After the crisis in Flint, Michigan sparked a national inquiry and events in Sebring, Ohio raised questions locally, the Ohio General Assembly responded with HB 512, which includes tighter deadlines for Ohio public water systems to respond and notify residents of lead in drinking water. HB 512 was introduced on April 7, 2016, quickly passed by the Ohio Legislature in May, and signed into law by the Governor. The new law becomes effective on September 8, 2016.

The new law establishes sampling, corrosion control, and individual tap action levels, more stringent public notification deadlines, higher administrative enforcement penalties, requirements for identifying and mapping lead infrastructure in public water systems, and financial assistance for communities and schools with lead in drinking water concerns. The enacted version largely mirrors the version that was introduced, which we previously covered here. The key provisions of the changes to Ohio law regarding lead in drinking water are summarized in the full alert: New Ohio Law Increases Protections from Lead Contamination in Drinking Water.

US EPA Issues First Year Implementation Plan for New Lautenberg Chemical Safety Act

The US EPA has issued a “First Year Implementation Plan” outlining the steps it will take over the next year (and beyond) toward implementing the requirements of the new Frank R. Lautenberg Chemical Safety for the 21st Century Act, the legislation signed into law by President Obama on June 22 to modernize the Toxic Substances Control Act (TSCA).  The Lautenberg Act imposes a number of new requirements and responsibilities on US EPA, with several major tasks that must be completed with the first twelve months after the law’s enactment, including promulgating several significant rulemakings, initiating risk evaluations on 10 Work Plan chemicals and other efforts.

In announcing the Implementation Plan, US EPA underscored its commitment “to engage partners and stakeholders early in the process, and to be as transparent as possible.” The agency emphasized that the Plan “is not intended to be a comprehensive listing of all requirements in the new law” but instead “is intended to be a roadmap of major activities EPA will focus on during the initial year of implementation.” US EPA also stated that the Plan is a “living document” that will be “further developed over time.”

The Implementation Plan is organized into four broad categories of tasks that US EPA must fulfill: (i) Immediate Actions; (ii) Framework Actions; (iii) Early Mandatory Actions; and (iv) Later Mandatory Actions. Continue Reading

US Mine Safety and Health Administration Proposes New Workplace Examination Rule; Requests Information Regarding Exposure of Underground Miners to Diesel Exhaust

On June 8, 2016, the US Mine Safety and Health Administration (MSHA) published the following two documents in the Federal Register, seeking information and comments from industry stakeholders: (1) a proposed rule addressing “Examinations of Working Places in Metal and Nonmetal Mines (MNM)”; and (2) a Request for Information (RFI) on “Exposure of Underground Miners to Diesel Exhaust.” The comment period for both publications ends September 6, 2016. Continue Reading

LexBlog