Prop 65 Victory For Chemical Industry In Monsanto Case Has Been Appealed

On June 22, Judge William B. Shubb of the US District Court for the Eastern District of California granted Monsanto’s motion for summary judgment and imposed a permanent injunction on the enforcement of Proposition 65 for glyphosate (the active ingredient in Roundup) in the closely followed case National Association of Wheat Growers v. Becerra.  The ruling was important to many in the chemicals and agricultural world, and we provided an Expert Analysis of the district court decision in Law360.

However, as we expected, the California Attorney General appealed the decision to the Ninth Circuit Court of Appeals on September 9, 2020 (Case No. 20-16758), with the main issue on appeal being whether the First Amendment bars the State of California from requiring a Prop 65 Warning.

While mandatory to file, the Attorney General’s September 17, 2020 Mediation Questionnaire provides that he “believes the content and method of delivering such a [Prop 65] warning are both issues susceptible to a mediated resolution.”  This may mean the Attorney General could be considering a mediated agreement in the case if possible.  As we stated in our Law360 analysis, if the district court decision is upheld in the Ninth Circuit, it will set a significant precedent in the Prop 65 world and deal a huge blow to the State of California.

For now, we must wait while the parties go through the appeals process.  We will continue to monitor this case to its final resolution and provide reader updates.

UK REACH Roadmap: Are You Ready For the New UK Chemical Regulation?

At the end of the transitional period, on 31 December 2020, the chemical regulation EU REACH will gavelcease to apply in the UK. This will automatically invalidate EU REACH registrations and authorisations held by UK companies. A stand-alone UK chemical regulation UK REACH will replace EU REACH in the UK. UK-based EU REACH registrants, therefore, need to transfer their registrations and authorisations to an EU-27/EEA legal entity, if they want to retain them.  UK companies who manufacture or import chemicals will also need to ensure they have valid registrations under the new UK REACH regime.

The change to UK REACH will impact different supply chains in different ways, and the best solutions will also be very specific to those supply chains, for example, whether an “only representative” will be appointed to remove the burden from new UK importers. All potentially affected companies should review supply chains to identify the possible roles to be played by each “actor”; under UK and EU REACH to ensure the supply chain can continue to function smoothly and/or what adjustments may be necessary, or commercially sensible.

Anita Lloyd and Dave Gordon provide readers with insights on what this means in practice and the steps affected companies need to take, and by when, in their analysis available here.

Movement on US House and Senate Energy Packages

US Capitol at sunny dayOn Monday, the White House released its statement of administration policy (SAP) threatening to veto the proposed clean energy package from the House of Representatives (H.R. 4447). Trump Administration policy advisors argued that the legislation would reinstate “big government policies and programs” and “undermine the Administration’s regulatory agenda.” Specifically, the SAP criticizes workforce development provisions in the bill, highlighting that these may override and duplicate efforts at the federal agency level, as well as comments on the overall cost of the legislation. Continue Reading

US House of Representatives to Consider Clean Energy Package

US Capitol at sunny dayThis week, the House of Representatives is set to consider H.R. 447, the House Clean Energy Package. Over 150 amendments were offered on the package and today, the House Rules Committee will meet today decide which of those amendments to consider on the House floor. Depending on the outcome of the House Rules Committee meeting, the legislation could be considered on the floor as early as tomorrow.

Of interest to states and local governments, the legislation would include:

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Supporters of US Plastic Pollution Reduction Bill Press On Despite Challenging Times

The coronavirus pandemic has resulted in increased use of disposable plastics and plastic waste reduction efforts have experienced setbacks as the need for these products grows. Nonetheless,

proponents of a federal bill aimed at reducing plastic waste, the “Break Free From Plastic Pollution Act,” (the Act) continue to advocate for its passage.  Recently, Sen. Tom Udall (D-NM) and Rep. Alan Lowenthal (D-CA) authored an open letter urging states to use the Act as a blueprint for passing state legislation to reduce plastic waste. The bill would require manufacturers of items including packaging and paper to support recycling programs and use more recycled plastics feedstock in addition to mandating more stringent US EPA standards for the sector. It would also restrict use of disposable plastic products by retail establishments.

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After Almost Four Decades, White House Issues New NEPA Regulations–Lawsuits Likely

White House at NightThe Trump administration recently finalized updates to regulations for environmental impact review of large projects under the National Environmental Policy Act (NEPA).  NEPA was originally enacted 50 years ago to reorient federal agencies to consider the environmental impact of projects.  It generally requires federal agencies to consider environmental effects of proposed projects before they are approved. It is a procedural statute and does not require project modification.

NEPA is implemented by the White House Council in Environmental Quality (CEQ), and CEQ last made significant updates to the regulations in 1986.  This newest round of regulation aims to “update, modernize, and clarify the regulations to facilitate more efficient, effective, and timely NEPA reviews by Federal agencies in connection with proposals for agency action.”  Among other changes, the revised regulations impose a presumptive time limits and page limits on certain NEPA processes, including Environmental Impact Statements (EISs) and Environmental Assessments (EAs), and permit agencies to borrow “categorical exclusions” from other agencies in order to streamline projects.

The CEQ’s final rule promises the following additional benefits from the updates:

  • Improve inter-agency coordination in the environmental review process;
  • Promoting earlier public involvement;
  • Increase transparency, and
  • Enhance the participation of States, Tribes, and localities.

Critics, however, argue that the revised rules undermines the purpose of NEPA and fail to give all participants an adequate voice.  The National Resources Defense Council has already promised to challenge the “illegal” regulations.  The Trump administration’s changes to the rules could play a role in November’s election, including mobilizing environmental groups.  Indeed, a different administration could eliminate the NEPA rollback with a majority vote in Congress and the president’s approval.

Squire Patton Boggs will continue to monitor this regulatory change and the resulting litigation.

 

Heavy Duty Engine Regulatory Update: US EPA Enforcement Discretion and CARB Proposed Rulemaking

flagsWe are continuing to follow regulatory developments proposed for the heavy-duty vehicle and engine sector.  In our most recent blog post on the topic, we covered updates on timing for the United States Environmental Protection Agency (US EPA) Cleaner Trucks Initiative and the California Air Resources Board’s (CARB) efforts related to Heavy-Duty Low NOx Omnibus rulemaking and the Advanced Clean Trucks Initiative.  In the past few months, additional progress has been made and both agencies have outlined paths regarding timing.  A summary of such updates and an overview is provided in this post, including a deadline of August 25, 2020 to provide written comments on CARB’s Proposed Heavy-Duty Engine and Vehicle Omnibus Regulation and Associated Amendments.  Continue Reading

Ohio Adopts CERCLA Bona Fide Prospective Purchaser Defense

On June 16, Ohio Governor DeWine signed into law H.B. 168, which creates a “bona fide prospective purchaser” (BFPP) affirmative defense to liability for performing investigative or remedial activities that arise out of release or threatened release of hazardous substances.  Ohio follows a number of other states that have similarly enacted a BFPP defense or otherwise exclude BFPPs from liability.  The defense provides that a person is “immune from liability” under Ohio’s environmental laws, including liability under O.R.C. Chapters 3704, 3734, or 6111, for such investigative or remedial activities.  Further, the BFPP defense applies “retroactively” to pending causes of action that were initiated prior to the law’s effective date of September 14, 2020.

The BFPP defense will be familiar to many purchasers of commercial property as it is a primary driver in performing pre-acquisition real estate due diligence in order to avoid potential liability under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  CERCLA imposes strict, joint and several liability on current owners and operators of facilities where a release or threatened release of hazardous substances has occurred, as well as past owners and operators of a facility at the time when disposal of hazardous substances occurred, arrangers for such disposal and certain transporters of hazardous substances to such facilities.  The statute imposes broad liability for response costs associated with the investigation and remediation of such releases or potential releases.  However, the statute also contains a BFPP affirmative defense to liability under CERCLA.

Importantly, the CERCLA BFPP defense offered no protection to liability under state environmental cleanup laws.  The new Ohio BFPP defense provides such liability protection and, in closely following the structure of the federal corollary, allows purchasers of brownfields and other contaminated properties to acquire property with knowledge of contamination from past releases of hazardous substances without acquiring any associated liabilities so long as certain prescribed conditions are met.

First and foremost of these conditions is that a person must be able to demonstrate that they are a BFPP of the facility.  Ohio borrows the definition from CERCLA, which provides that a person must be able to show that:

  • All disposal of hazardous substances at the facility occurred prior to acquisition;
  • the person made all appropriate inquiry (AAI) into the previous ownership and uses of the facility (e.g. obtained a valid Phase I report);
  • the person provides legally required notices with respect to the discovery or release of any hazardous substances;
  • the person exercises appropriate care with respect to hazardous substances at the property (including taking reasonable steps to stop continuing releases and prevent future releases, and prevent exposures);
  • the person provides full cooperation, assistance, and access to persons performing response actions;
  • the person is in compliance with land use restrictions and does not impede institutional controls;
  • the person complies with information requests and administrative subpoenas; and
  • the person is not potentially liable or “affiliated” with any person that is potentially liable for response costs at the facility.

In addition, Ohio’s defense also requires that the state’s cause of action rests on the person’s status as an owner or operator of the facility, and the person does not impede a response action or a natural resource restoration at the facility.

While many of the above requirements are somewhat easily established under most scenarios (such as preparing a valid Phase I environmental site assessment), other requirements may be more difficult to establish and less certain as to whether they are satisfied.  For instance, “appropriate care” includes taking reasonable steps to stop continuing releases and prevent future releases.  Given the complexity of many contaminated sites, there can be significant debate over whether efforts to address a release are adequate to meet the “reasonable steps” standard.  Indeed, it is possible that a party would need to conduct an extensive site cleanup to satisfy this requirement.  On that note, the new BFPP defense is incorporated into Ohio’s VAP statute, but leaves in place the option to take a site through a traditional VAP investigation and cleanup, which can offer liability protection via obtaining a Covenant Not to Sue (CNS) from Ohio EPA.

In addition to establishing the affirmative defense, the legislation also includes some conforming changes to the VAP statute and a few modifications, such as addressing circumstances where a CNS is voided because an institutional control or activity and use limitation was violated.  Whereas a CNS was automatically voided when such controls were violated, the statute now authorizes (but does not mandate) the Director to issue an order voiding a CNS. Consequently, such discretionary actions of the Director are appealable.

The new BFPP defense should be received as welcome news to purchasers of brownfields, as it provides another option for avoiding liabilities associated with the purchase of contaminated property.  This option may be preferable as it potentially avoids entry of a site into a full-blown VAP cleanup with the need for governmental approvals to obtain liability protection.  On the other hand, the BFPP defense only comes into play once litigation has commenced and the court determines whether or not all necessary requirements have been met, which can present myriad additional risks.  Regardless, it is always good to have options and brownfield purchasers can now evaluate how best to insulate themselves from liability, giving consideration both to this new affirmative defense as well as a traditional VAP cleanup.

US EPA Amends TSCA “Small Manufacturer” Definition for Chemical Data Reporting Requirements

On May 28, 2020, the US Environmental Protection Agency (US EPA) issued its final rule amending thescience laboratory glassware definition of a “small manufacturer” under section 8(a) of the amended Toxic Substances Control Act (TSCA). As a result of the change, some manufacturers and importers who were previously subject to Chemical Data Reporting (CDR) requirements under the current definition will be exempt or subject to reduced reporting requirements under the new rule. The amended definition comes shortly before the reporting period for 2020 CDR submissions opens on June 1, 2020. We have previously covered a number of other key changes US EPA has made to the information that chemical manufacturers and importers must submit to the agency pursuant to the CDR rule. Continue Reading

Updated OSHA Guidance Demonstrates Employers’ Need for Further Pandemic Planning (US)

VirusOn May 19, 2020, OSHA issued two updated memorandums to regional administrators and state plan designees. The first updated the agency’s enforcement guidance for recording COVID-19 cases in the workplace. As we discussed here, OSHA originally indicated on April 10, 2020 that it would be exercising “enforcement discretion” and focusing COVID-19 recordkeeping requirements in the healthcare, emergency response, and correctional institution fields only—except where there was objective evidence reasonably available to an employer that a COVID-19 case was work-related. The aim was to allow vital COVID-19 response resources to be allocated elsewhere. Continue Reading

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