MSHA Workplace Examination Rule Delayed Once Again

On January 23, 2017, the Mine Safety and Health Administration (MSHA) published its long-awaited final rule regarding modified workplace examination requirements in non-coal mines.  The rule was originally scheduled to go into effect in May of this year, but implementation was delayed twice until October 2, 2017.

Over the past several months, operators have been widely implementing organizational changes in preparation for the October 2 effective date of the new requirements; however, on September 12, MSHA published two additional proposed rules—one rule proposing to again delay implementation of the final rule, and a second rule, once again, proposing additional substantive changes to the final rule.

The current final rule most notably requires workplace examinations to be conducted before work begins and ramps up notification, recording, and recordkeeping requirements associated with the examination.  For example, the current final rule requires that the examination be recorded prior to the end of the shift, that all miners working in the affected areas must be promptly notified of hazardous conditions, and that all discovered conditions that may adversely affect the safety and health of miners be recorded, even if they are corrected before work begins.  Other requirements can be found here.

The proposed further delay in effective date of the final rule is designed to allow time for public notice and comment on MSHA’s two substantive changes to the final rule.  First, MSHA is now proposing to change the timing of the workplace examination to occur either “before work begins,” as currently drafted, or “as miners begin work.”  Importantly, however, adverse conditions must still “be identified before miners are exposed,” thereby raising questions as to whether this modification practically changes an operator’s requirements.

Second, the proposed rule would require operators to only record hazards that have not been corrected before miners might be exposed to them, as opposed to all hazardous conditions under the current final rule.  Although this provision would lower the likelihood that MSHA could use an operator’s own examination records against them to issue citations for conditions promptly corrected, it does not remove this risk altogether.  The remaining provisions remain unaltered.

Appearing to change course from the rationale underlying the current final rule, MSHA has opined that substantively this modification will give operators greater flexibility to manage their safety and health programs without reducing protections associated with the examination.  MSHA has also stated that the change would save operators approximately $27.6 million in annual operating costs.  In addition to providing an opportunity for notice and comment, MSHA has also said the associated delay will “offer additional time for MSHA to provide stakeholders training and compliance assistance.”

The current proposed delay would extend implementation of the final rule until May 2, 2018.  Comments on the delay must be received by MSHA by September 26, 2017.  In the meantime, MSHA will take public comments regarding the substantive changes for 60 days following publication or until November 13, 2017.   Four public hearings will also be held in Arlington, Virginia (October 24, 2017), Salt Lake City, Utah (October 26, 2017), Birmingham, Alabama (October 31, 2017), and Pittsburgh, Pennsylvania (November 2, 2017).  Each hearing will begin at 9 a.m. local time.

Enforcement of UK Waste Exemptions – No Longer the Light Touch?

Registered waste exemptions are not to be treated lightly and compliance with their conditions is not flexible, as the Environment Agency has reinforced in a recent case.  A lengthy investigation culminating in a nearly £20,000 fine has been handed down by Chelmsford Magistrates Court in relation to illegal deposits of waste on farmland in Essex.

The illegal deposits occurred in spring 2015 when a tenant farmer on land in Stow Maries, Essex employed TJ Cottis Transport Ltd to deliver 3,920 tonnes of inert construction waste for use in flood defence works.  TJ Cottis then paid the farmer £4,800 for the deposit, a figure reported to be around £24,000 less than the company would have had to pay in landfill charges, had the waste been disposed of correctly.

This deposit was, however, in breach of the U1 registered waste exemption held which allowed 1,000 tonnes of soil and stone to be used on the land only for construction purposes.  U1 exemptions allow suitable waste such as crushed bricks, concrete rocks, soil and aggregate to be used to create tracks or paths, or used in landscaping for development.  This exemption cannot be used for disposing of waste that is unsuitable and does not permit the use of more waste than is specified in the exemption wording of each waste type. Environment Agency guidance is also clear that as well as registering the waste exemption, parties may need to comply with other legislation including planning permissions and flood defence consents.

In this case, there were various breaches.  The waste material used included waste types that were not permitted including plastic and plasterboard which was also unsuitable for the construction of flood defences.  Furthermore, greatly more than 1,000 tonnes was deposited, and flood defence works were activities which were not permitted under the exemption without additional consents, which were not obtained.  The area where the waste was deposited was also highly environmentally sensitive, being a site of special scientific interest (“SSSI”), a special protection area, a special area of conservation and a RAMSAR site (a wetland site designated of international importance under the Ramsar Convention), requiring specific consents from Natural England.

The deposit was a clear breach of the Environmental Permitting (England and Wales) Regulations 2016 (“Permitting Regulations”) which allow deposits of waste only in compliance with the conditions of the relevant exemption.  On 3 August 2017, the tenant farmer pleaded guilty to knowingly causing the illegal deposit. T J Cottis Transport Limited and Jedd Cottis (a director of the company) both pleaded guilty to depositing the waste without an environmental permit and failing to comply with duty of care requirements.  They were fined a total of £19,430.

Although the case indicates that the Environment Agency and Natural England take this type of offence very seriously, and the Environment Agency is reviewing compliance with registered waste exemptions more strictly than is often believed, the fine handed down has been criticised as simply being close to the figure the company saved in landfill charges, and therefore not amounting to a sufficient deterrent to future possible offenders.

The Definitive Guidelines 2014 for environmental offences were published by the Sentencing Council and designed to increase fines for environmental offences to ensure that those committing environmental crimes could not profit from those crimes and so that the fines acted as a suitable deterrent.  Although the fine in this case was not as high as many would have liked, the investigation and subsequent action by the regulators does show commitment to enforcing the conditions of registered waste exemptions (which are often treated fairly casually by exemption holders).  It also emphasises that the mere presence of such an exemption does not allow other consents and permits required under other legislation and/or from other regulators to be ignored.

It is likely that the widespread reporting and interest in this conviction will cause others depositing waste under the remit of a registered waste exemption to consider more carefully the limits of those exemptions in both quantity and type of waste which can be deposited, as well as which other consents may be required.


Increased Risk of Clean-Up Liability for Owners of Closed Council Landfill Sites in England and Wales

A recent Court of Appeal case, Powys County Council v Price and Hardwick, has addressed the issue of liability of successor public authorities under the UK contaminated land regime (Part 2A Environmental Protection Act 1990) (“Part 2A”).

The case related to a landfill site that had been operated by local authorities of the county of Powys until the early 1990s. It has subsequently been restored and returned to private landowners for agricultural use. Powys County Council (Powys) was created in 1994, and in 1996 it took over responsibility for a number of boroughs.

From 2001, Powys County Council carried out monitoring and treatment work at the site on the basis that it would be responsible under the Part 2A regime for any potential contamination caused by its predecessors. However, in 2015 Powys stopped all activity on the grounds that the 2007 case of R (National Gas Grid (formerly Transco plc)) v Environment Agency (“Transco”) meant it was not responsible for landfilling operations that has ceased prior to 1996.  In Transco, the UK House of Lords held that National Grid Gas (formerly Transco) – the privatised gas utility company that was a statutory successor to the publicly owned British Gas – was not liable under Part 2A for the acts of its predecessors. The rationale for this decision was that the statutory scheme of transfer did not specifically include such contingent/future liabilities.

The Powys landfill site has not actually been designated as contaminated land under Part 2A, but the landowners brought this case because of concerns that it might be identified as such in the future.

The High Court ruled that Powys would be an ‘appropriate person’ under Part2A, but Powys appealed and the Court of Appeal disagreed.

The Court of Appeal held that Powys was not liable for the acts of its predecessor council(s). Following the reasoning of the Transco case, the Court could not find anything in the statutory scheme of transfer which was capable of transferring future liabilities (Part 2A did not come into force until 2001).

Local government in the UK has seen many structural changes over the last century, but many Councils have been operating under the assumption that they would be an ‘appropriate person’ in relation to the acts of predecessor authorities. However it now appears that this will not always be the case (it will depend upon the specific terms of the underlying enabling legislation in each case).

In cases like to Powys one, if the Council is not an ‘appropriate person’, remediation responsibility under Part 2A is likely to instead fall upon the current land owner. This could have significant ramifications for current owners of land which has historically been operated by a local authority (landfill sites being the most likely example).

D.C. Circuit Holds US EPA Cannot Stay Implementation of Methane Rule Issued by Obama Administration

On July 3, 2017, the US Court of Appeals for the D.C. Circuit vacated US EPA’s decision to stay implementation of portions of a final rule concerning methane and other greenhouse gases.  In Clean Air Council v. Pruitt, a three-judge panel held that US EPA lacked authority under the Clean Air Act to stay the Obama-era rule, and therefore, the Court granted a motion to vacate the stay brought by a group of environmental organizations.

In June 2016, US EPA Administrator Gina McCarthy issue a final rule under the Clean Air Act establishing “new source performance standards” for fugitive emissions of methane and other pollutants common to the oil and natural gas industries.  The rule is designed to prevent leaks of methane at oil and gas facilities.  It took effect on August 2, 2016 and required regulated entities, among other requirements, to identify potential leaks of methane from their facilities by June 3, 2017.

After US EPA published the rule, several industry groups filed petitions seeking reconsideration of the rule pursuant to Section 307(d)(7)(B) of the Clean Air Act.  In response, new US EPA Administrator Scott Pruitt announced that US EPA would reconsider certain portions of the 2016 rule and would stay its implementation for 90 days “pending reconsideration.”  On June 16, 2016, US EPA published a notice of proposed rulemaking announcing its intention to extend the stay for two years and to “look broadly at the entire 2016 Rule” during the reconsideration proceeding.

In vacating the stay, the D.C. Circuit explained that reconsideration of a final rule under Section 307(d)(7)(B) was permitted only where the person seeking reconsideration has an objection to the rule that is of “central relevance” and would have been “impractical” to raise during the notice and comment period preceding the final rule.  The Court held that the objections raised by the industry groups could have been, and actually were, raised during the rule’s notice and comment period.  Therefore, US EPA’s stay was unlawful.

The D.C. Circuit emphasized that even though US EPA’s stay was unlawful and vacated, US EPA is free to re-write the 2016 rule in accordance with the Administrative Procedure Act.  However, the current rule remains in effect until replaced, and oil and natural gas entities now face uncertainty regarding how US EPA will enforce the Obama-era rule’s requirements for reducing fugitive emissions of methane.

On August 10, 2017, the D.C. Circuit rejected a request by US EPA and industry groups to reconsider the Court’s July 3 decision to vacate the stay.

Warning: Only One Year Left Before New Prop 65 Regulations Become Operative On August 30, 2018

As of today’s date, businesses have just one more year to comply with the newly-amended Clear and Reasonable Warnings regulations from California’s Proposition 65 (“Prop 65”), which take effect on August 30, 2018.  Businesses should consider the Clear and Reasonable Warning compliance requirements and guidance outlined below now to be prepared for this deadline and minimize the risk of enforcement litigation that undoubtedly will ensue after the regulations become effective on August 30, 2018.  In fact, businesses can start complying now if they choose.   Continue Reading

US EPA and Army Corps of Engineers Propose Re-Codification of Definition of “Waters of the United States” Pre-Existing Rules

On July 27, 2017, US EPA and the US Army Corps of Engineers published a Proposed Rule regarding the “Definition of ‘Waters of the United States; – Recodification of Pre-Existing Rules.” The Proposed Rule is a “first step in a comprehensive two-step process intended to review and revise” the definition of “waters of the United States” so as to be consistent with the Executive Order issued by President Trump on February 28, 2017. This “first step” proposes to rescind the definition of “waters of the United States” and to re-codify the definition of “waters of the United States” currently effective under the Clean Water Act pursuant to the Sixth Circuit’s stay of the definition of “waters of the United States” promulgated in 2015.

The Executive Order issued on February 28, 2017 by President Trump titled “Presidential Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States Rule’” requires that US EPA and the Assistant Secretary of the Army for Civil Works review the final rule “Clean Water Rule: Definition of ‘Waters of the United States’” published on June 29, 2015 and rescind or revise the rule so as “to ensure that the Nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.” The Order also states that US EPA and the Corps “shall consider interpreting the term ‘navigable waters,’ as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).”

As we previously reported, the “waters of the United States” rulemaking that was finalized in 2015 expanded federal jurisdiction over waters that were not previously covered. As a result, 31 states and several other parties sought judicial review on substantive and procedural grounds in multiple actions brought in Federal courts. On October 9, 2015, the Sixth Circuit issued a nationwide stay of the 2015 definition of “waters of the United States.” On January 13, 2017, the US Supreme Court granted certiorari to review the question of whether a court of appeals has original jurisdiction to review challenges to the 2015 rulemaking. The Sixth Circuit has ordered that the briefing schedule be held in abeyance pending a US Supreme Court decision on the issue of its jurisdiction.

With respect to this Proposed Rule implementing the “first step” to rescinding and revising the definition of “waters of the United States,” the agencies have extended the comment period until September 27, 2017. The second step of this process will involve a rulemaking whereby the agencies will conduct “a substantive re-evaluation of the definition of ‘waters of the United States.’” Squire Patton Boggs will continue to monitor these rulemakings.

Deadlines Set for Submission of Chemical Substance Notifications to US EPA under the TSCA Inventory Reset Rule

US EPA’s rule to “reset” the Toxic Substances Control Act (TSCA) Inventory of chemical substances was formally published in the Federal Register on August 11, 2017. This means that the clock is now running on the 180-day deadline for chemical manufacturers and importers to submit to US EPA the chemical substance notifications required by the rule. The deadline for the submissions is now set as February 7, 2018.

The Inventory Reset Rule requires every chemical manufacturer and importer to notify US EPA of each chemical substance it manufactured or imported for a non-exempt commercial purpose in the US during the 10-year period ending June 21, 2016 (the “lookback period”). Manufacturers and importers must provide this notification to US EPA within 180 days from August 11, 2017, the date on which the rule was in the Federal Register – i.e., by February 7, 2018. Each chemical substance for which US EPA receives such a notification will be designated as “active” on the TSCA Inventory.

The rule also gives chemical processors the option to report to US EPA any chemical substance they processed during the same lookback period, but they must do so within 420 days from the rule’s Federal Register publication date – i.e., by October 5, 2018. Processors have this extended submission period so that they can review a “draft” version of the revised Inventory that US EPA will issue approximately 60 days after the close of the 180-day reporting period for manufacturers and importers. Processors thus will have roughly 180 days after US EPA issues the draft revised Inventory to identify any chemical substances that manufacturers have failed to designate as “active” and submit notices to US EPA for the substances they processed during the lookback period, in order to keep such substances from being designated as inactive.

Any chemical substance not reported to US EPA by a manufacturer, importer or processor by the applicable deadline will be designated as “inactive” on the Inventory. Once the Inventory “reset” is finalized, no one may manufacture, import or process an inactive substance without giving US EPA prior notice not more than 90 days before the anticipated date of manufacturing, importing or processing.

Details on the TSCA Inventory Reset Rule and its implementation can be found in our client alert here.

US EPA Issues Three Major Rules Affecting Chemicals Industry

On June 22, 2017, US EPA issued three major rules required by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (LCSA), which amended the Toxic Substances Control Act (TSCA) in 2016.   The three TSCA rules addressed: (1) “resetting” the TSCA Inventory, (2) chemical substances prioritization, and (3) risk evaluations for chemical substances.  The Prioritization and Risk Evaluation rules were published in the Federal Register on July 20. As of the date of this writing, the Inventory Reset rule has not yet been published in the Federal Register.  Squire Patton Boggs has prepared detailed client alerts addressing each of these rules and their implementation.  A summary of each rule along with the client alert link is provided below. Continue Reading

D.C. Circuit Strikes Down Portions of the RCRA Definition of Solid Waste Rule

On July 7, 2017, the D.C. Circuit Court of Appeals issued a decision striking down portions of US EPA’s Definition of Solid Waste (DSW) Rule, which defines when certain hazardous secondary materials (i.e. recyclable materials generated as the remainder of industrial processes) become “discarded” and thus subject to regulation as a solid waste.  The Rule, issued in 2015, was the latest effort to define “solid waste” under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§6901 et. seq., and was challenged by both industry and environmental groups.  Squire Patton Boggs was actively involved in the appeal on behalf of an industrial intervenor-movant.

In a per curiam decision, the Court sided with the industry petitioners in large part, dismissed the environmental groups’ challenges, and vacated two key aspects of the 2015 DSW Rule.  First, the Court vacated the fourth prong of the “legitimacy” test to distinguish between “true” and “sham” recycling, which must be met to qualify for exclusion from regulation as a solid waste.  Second, the Court vacated most of the “Verified Recycler” Exclusion and reinstated the pre-existing 2008 “Transfer-Based” Exclusion.  In so ruling, the Court also severed and retained requirements from the vacated 2015 exclusion relating to emergency preparedness and containment standards.

Legitimacy Factor 4 Rejected

In the 2015 DSW Rule, US EPA established four mandatory “legitimacy” criteria to differentiate legitimate from “sham” recycling.  “[B]ecause EPA’s waste disposal regulations are acknowledged to be very costly to meet, ‘there is an incentive for some handlers to claim they are recycling when, in fact, they are conducting . . . disposal.’  To prevent such evasion, EPA polices the line ‘between ‘legitimate’ (i.e., true) recycling and ‘sham’ (i.e., fake) recycling.”  Opinion at 6 (internal citations omitted).

In order to be deemed legitimate, the 2015 DSW Rule required the recycling activity to meet all four of the following Legitimacy Factors:  (1) the hazardous material must provide a useful contribution to the recycling process; (2) the recycling process must produce a valuable product or intermediate; (3) the generator and recycler must manage the hazardous secondary material as a valuable commodity; and (4) the product of the recycling process must be comparable to a legitimate product or intermediate.  See 40 CFR §260.43.

Although the Court upheld Legitimacy Factor 3, it ruled that Factor 4 was unreasonable as applied to recyclable materials which have commercial product analogues.  If such recyclable materials are even slightly more hazardous than their commercial analogues, they would not meet Legitimacy Factor 4 and therefore would constitute a solid waste under RCRA, even if they posed no significant risk to human health or the environment.  Consequently, the Court found that the Factor 4 test is “not a reasonable tool for distinguishing products from wastes” and is unreasonable as applied across the board to all hazardous secondary material recycling.  See Opinion at 13-14.

Verified Recycler Exclusion Vacated

In the 2015 DSW Rule, US EPA established the Verified Recycler Exclusion at 40 CFR §261.4(a)(24), which provided that hazardous secondary materials sent to a third-party recycler were exempt from regulation as solid wastes under RCRA so long as the materials were sent to a “verified recycler” having either a RCRA permit or  a RCRA variance from US EPA or an authorized state and certain other operational requirements (such as emergency preparedness and containment standards, discussed below) are met.

The Verified Recycler Exclusion replaced the prior Transfer-Based Exclusion from the 2008 DSW Rule, which exempted hazardous secondary materials sent to a third-party recycler so long as the generator had made “reasonable efforts” to ensure that the recycler met standards for legitimate recycling.  Whereas the 2008 Transfer-Based Exclusion exempted materials based on the generator’s reasonable efforts to verify the third-party recycler’s legitimacy, the 2015 Verified Recycler Exclusion transferred this legitimacy confirmation responsibility to US EPA or an authorized state by requiring that the third-party recycler hold either a RCRA permit or variance.

Industry petitioners argued that the more stringent oversight requirement in the Verified Recycler Exclusion was based upon US EPA’s unreasonable presumption that recycling by a third-party inherently carries a greater risk that the hazardous secondary materials will be discarded than in the case of generator-controlled recycling, which does not require a RCRA permit or variance to be exempt under the 2015 DSW Rule.  US EPA argued that various studies suggested that the recycling of low-value materials by third-party recyclers does carry a higher risk of discard, but the Court found that these theoretical studies were not a sufficient basis for the Verified Recycler Exclusion’s more stringent oversight requirements: “EPA fails to provide sufficient linkage between theory, reality, and the result reached.”  Opinion at 29-32.  Consequently, the Court vacated the 2015 Verified Recycler Exclusion and reinstated the 2008 Transfer-Based Exclusion.

Severed Provisions Retained

Although it vacated the 2015 Verified Recycler Exclusion, the Court considered whether any aspects of the exclusion were “severable” and therefore could be upheld: “We will sever and affirm a portion of an administrative regulation only when we can say without any substantial doubt that the agency would have adopted the severed portion on its own.”  Opinion at 35.

Here, the Court concluded that two aspects of the Verified Recycler Exclusion were severable and should be upheld to address regulatory gaps from the 2008 Transfer-Based Exclusion.  First, the Court upheld the emergency preparedness and response requirements at 40 CFR Part 261, Subpart M, which require the generator to have certain processes and equipment in place, such as use of fire control systems, to minimize the risk of fire, explosion or unplanned release that could threaten human health and the environment.

Second, the Court upheld the  Verified Recycler Exclusion’s containment standards, which require that recyclable materials be held in a “unit” that is in good condition (e.g. not leaking) and designed to prevent releases to the environment, is properly labeled or otherwise subject to a system (such as a log) to immediately identify the materials contained in the unit, and that all contained materials placed in the unit are compatible.

Petroleum Refining Spent Catalysts

By vacating the 2015 Verified Recycler Exclusion and reinstating the 2008 Transfer-Based Exclusion, the Court essentially eliminated any third-party recycler exemption for petroleum refining spent catalysts, designated as K171 and K172, because spent catalysts were not eligible for the 2008 Transfer-Based Exclusion.  The Court found that “[a]t no point in the record does EPA propose keeping the Transfer-Based Exclusion and repealing its spent catalyst disqualifier.”  Opinion at 35.  However, the Court noted that it would be willing to consider further argument on this point: “If EPA, or any party, wishes to disabuse us of our substantial doubt with a petition for rehearing, we will of course reconsider as necessary.”

In sum

By reinstating the 2008 Transfer-Based Exclusion, the Court’s ruling significantly expands the RCRA regulatory exclusion for third-party recycling of hazardous secondary materials (except for petroleum refining spent catalysts).  However, by severing and upholding the 2015 DSW Rule’s emergency preparedness and containment standards, the Court’s ruling has added additional regulatory conditions to this 2008 exclusion.   By contrast, the Generator-Controlled Exclusion under the 2015 DSW Rule was not challenged and is unaffected by the ruling.  While there is much in this decision for industry to cheer, generators and recyclers of hazardous secondary materials will need to carefully consider and adhere to both the 2008 Transfer-Based Exclusion and the 2015 DSW Rule’s emergency preparedness and containment standards in order to ensure that third-party recycling of such materials remains exempt from hazardous waste regulation under RCRA.