Mobile Sources Face an Increased Risk of Agency Enforcement and Citizen Suits

On June 12, 2019, the US Environmental Protection Agency (US EPA) announced its seven enforcement and compliance assurance priority areas for fiscal years 2020-2023. One of the National Compliance Initiatives includes “Stopping Aftermarket Defeat Devices for Vehicles and Engines.” Specifically, the Agency expressed that it will have a focus on reducing aftermarket defeat device manufacture, sale, and installation across vehicle types.

Additionally, a recent case in the U.S. District Court for the District of Utah has the potential to broaden the reach of citizen suits under the Clean Air Act (CAA). The court permitted a group, the Utah Physicians for a Healthy Environment (UPHE), to bring a citizen suit against businesses and individuals engaged in the sale and repair of trucks for violations under 42 USC § 7522, including provisions regarding defeat devices.  Section 7522 of the CAA, in part, prohibits any person manufacturing, selling, or offering to sell or install “any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass, defeat, or render inoperative” emission-related devices or elements of design. Prior to this case, courts have restricted enforcement of violations under § 7522 to the federal government. By providing an avenue for enforcement through citizen suits, the district court’s approach expands the exposure manufacturers could face and may justify an additional layer of risk assessment for the industry.

The CAA’s citizen suit provision provides that citizens may commence a civil action for a “violation of (A) an emission standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation.” Such an action may not proceed, however, “if the Administrator or State has already commenced and is diligently prosecuting a civil action in a court of the United States or a State to require compliance with the standard, limitation, or order. . . .” Historically, courts have interpreted the phrase “standard or limitation” to permit citizen suits only for air violations of stationary source emissions standards and certain other clear-cut violations. Violations under 42 USC § 7522 relating to the installation, sale, etc. of defeat devices, on the other hand, have traditionally been enforced only by government agencies because courts have interpreted the prohibitions in 42 USC § 7522 as not falling within “emission standards or limitations.”

Recently, however, in Utah Physicians for a Healthy Environment (UPHE) v. Diesel Power Gear LLC, et al., 2019 U.S. Dist. LEXIS 40545, the court considered a case where defendants allegedly violated 42 USC § 7522 of the CAA by tampering with emission control devices on diesel vehicles. Specifically, the petitioners claimed that the defendants “modified diesel trucks in violation of emissions limitations standards, sold parts designed to evade emissions standards, and sold illegally-modified trucks.” As a result, petitioners claimed these actions contributed to air pollution in the Wasatch Front and harm to members of UPHE. Chief Judge Shelby ultimately issued partial summary judgment to UPHE regarding its claims that the defendants violated the CAA and the Utah State Implementation Plan (SIP) regulations “relating to the installation, removal, operation, and sale of emission control devices on diesel vehicles.” In doing so, Judge Shelby potentially brought Section 7522 violations under the umbrella of CAA citizen suits. 

A threshold question the court had to consider was whether or not UPHE had standing to bring such a suit. In context, even if other district courts permit such citizen suits in the future, plaintiffs will still have to establish standing.  Judge Shelby analogized to Clean Water Act (CWA) cases in determining the standard to be used, and he stated that UPHE would have to show that “[d]efendants discharged a pollutant that causes or contributes to the kinds of injuries suffered by UPHE’s members in the Wasatch Front.” The petitioners met that burden, according to the court, by showing that defendants contributed NOx and particulate matter (PM) to air in the Wasatch Front. Judge Shelby noted that petitioners have standing to seek redress in the form of civil penalties, mitigation projects, and declaratory and injunctive relief, but not mandatory injunctive relief.

Other noteworthy aspects of the case include Judge Shelby’s analysis of corporate responsibility and passthrough sales. Judge Shelby distinguished the responsible corporate officer doctrine from the corporate veil and held that the “responsible corporate officer doctrine applies in CAA citizen enforcement suits.” In doing so, he referenced decisions in the Second and Eleventh Circuits that had applied the doctrine and held defendants personally liable under the CAA and the CWA. Regarding passthrough sales, the court declined defendants’ argument that selling vehicles already equipped with defeat devices did not rise to the level of selling such parts under Section 7522(a)(3)(B). Instead, Judge Shelby wrote that the “language plainly encompasses B&W Auto’s ‘as is’ sale of modified vehicles it knew or should have known to contain defeat emission parts.” 

Although this case is not binding on other federal courts, the success of UPHE may encourage other citizen suits in the future for CAA violations under Section 7522. It also occurs at a time when agency enforcement in the context of aftermarket parts is on the rise. For example, in April 2019, US EPA settled with an automotive parts manufacturer and distributor for manufacturing and selling defeat devices on vehicles. Aftermarket parts companies, manufacturers, and other entities in the industry should assess their risk profile based on these recent developments.

Asbestos Receiving Renewed Attention in Light of Additional US EPA Assessments under TSCA and Potential Ban by Congress

Asbestos is in the hot seat these days and is receiving significant attention from both US EPA and Congress.  In particular, US EPA continues to evaluate asbestos risks under the Toxic Substances Control Act (TSCA) and has imposed additional regulations, while Congress is currently considering an outright ban on the substance.

On April 25, 2019, US EPA issued a final Significant New Use Rule (SNUR) under Section 5 of TSCA to prevent certain discontinued uses of asbestos from re-entering the marketplace without a review by EPA.  The rule essentially restricts manufacturing, importing or processing of asbestos for certain target uses that are neither ongoing, nor already prohibited under TSCA. Continue Reading

May 2019 Update: Key Developments in UK and EU Environment, Safety and Health Law, Procedure and Policy

Electronic NewsWe are pleased to share with you the latest edition of “frESH Law Horizons – Key Developments in UK & EU Environment, Safety and Health Law, Procedure and Policy”. In our May edition, we summarise 26  developments in the environmental, safety and health sector. Some of the top stories this month include:

  • A fine for a NHS Trust for exposing contractors to asbestos during refurbishment work
  • The Food Standards Agency (FSA) fining a meat-cutting plant that prevented inspectors from entering the site
  • A US manufacturing company avoiding corporate manslaughter charges by pleading guilty to health and safety failings
  • The National Crime Agency publishing its strategic assessment and seeking investment to assist with serious and organised crime
  • The FSA and Food Standards Scotland announcing support for full-ingredient food labelling

For more detailed information on these developments, as well as access to the remaining summaries, make sure you download a copy from our website. You can also subscribe to ensure you receive our most recent edition every month.

US EPA Extends Date For Designation of Inactive Substances on the TSCA Inventory to August 5, 2019

US EPA has announced that the formal designation of substances as inactive on US EPA’s Toxic Substances Control Act (TSCA) Inventory will become effective on August 5, 2019. (84 Fed. Reg. 21773 (May 15, 2019)). US EPA’s action gives companies an additional three months to continue to manufacture, import and process substances, even though the substances are “identified” as “inactive” on the TSCA Inventory. Continue Reading

Springtime Showers Brings State Legislation in the US Friendly to Solar and Wind Energy

During the spring’s customarily dreary weather, many states have been seeking out sunshine and wind. In the months of March and April alone, eight states in the US passed legislation in an attempt to either make the permitting process easier for solar and wind power or to commit to the use of renewable power by a certain date.

The significant renewable energy legislation passed this spring are highlighted below: Continue Reading

Local Control in the US Gaining Steam … Again?

OilwellOn Tuesday, April 16, 2019, Colorado Governor Jared Polis signed Senate Bill 19-181 (SB19-181) into law.  SB19-181 was a controversial bill as it made its way through the Colorado Legislature, and it is now a controversial piece of legislation.  Indeed, SB19-181 passed the Colorado Legislature strictly along party lines, and it has now pitted some local Colorado communities against the oil and gas industry. Continue Reading

US District Court Blocks Trump Administration Effort to Revoke Obama-Era Mineral Leasing Withdrawals

Offshore Drilling RigOn March 29, 2019, the US District Court for the District of Alaska blocked the Trump Administration’s efforts to revoke the Obama Administration’s prior withdrawal of portions of the Arctic and Atlantic Oceans from mineral leasing under the Outer Continental Shelf Lands Act (OCSLA).  The court’s decision is noteworthy, not just for its implications for leasing on the outer continental shelf, but because it may foreshadow how courts will resolve similar and well-publicized challenges to President Trump’s authority under the Antiquities Act of 1908 (Antiquities Act) to revoke national monument designations for portions of Grand Staircase-Escalante and Bears Ears National Monuments in Utah. Continue Reading

President Trump Signs Drought Contingency Plan for Colorado River

Months ago, in the face of “unacceptably high” risk to the Colorado River’s complex system of reservoirs, US Bureau of Reclamation Commissioner, Brenda Burman, indicated that if the seven Colorado River Basin States could not agree to a drought contingency plan (DCP), then the federal government would post a notice in the federal register seeking comments from the states on the best course of action, and then unilaterally decide how to manage the river under fast-approaching shortage conditions.  On March 19, 2019, with the endorsement of the US Department of the Interior, the seven Basin States and key stakeholders formally submitted the Colorado River Basin DCP to Congress for immediate implementation.  In response to their March 19 letter, Congress invited the Basin States’ representatives to testify on March 28, 2019 on the need for the DCP. Continue Reading

UK Supreme Court Considering Parent Company Liability for Environmental Harm Caused by Overseas Subsidiaries

In Vedanta Resource PLC and another v Lungowe and others the UK Supreme Court has held that a claim for negligence and breach of statutory duty against a mining company based in Zambia and its English parent can be heard by the UK courts.

In so doing, this landmark decision has potentially opened the door to tortious claims against UK parent companies by persons based outside of the UK who have been impacted by acts of foreign subsidiaries. Continue Reading

President Trump Signs Two Executive Orders to Promote Development of Critical Energy Infrastructure

PipesOn April 10th, President Donald Trump signed two Executive Orders that seek to promote timely review of critical energy infrastructure projects in the United States. These changes to the review process seek to “enable the timely construction of the infrastructure needed to move our energy resources through domestic and international commerce.” (EO 13868.) “By promoting the development of new energy infrastructure, the United States will make energy more affordable, while safeguarding the environment and advancing our Nation’s economic and geopolitical advantages.” (EO 13868.)

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