PFAS – NOT JUST ANOTHER “EMERGING” CONTAMINANT

Posted on September 19, 2017 by Kenneth Gray

No longer emerging, Per- and Polyfluoroalkyl Substances (PFASs) have exploded on the environmental and toxic tort landscape in 2016 and in 2017.  Cognoscenti will recall U.S. EPA phase-out initiatives dating back to 2000, EPA Drinking Water Health Advisories set in 2009 and the TSCA action plan of the same year, the 2012 EPA drinking water monitoring rule, and even a blog in this very space “way back” in 2011.

Why have PFASs recently been compared to asbestos and PCBs for potential costs and impacts?  And why will they continue to be significant even if there is no further federal regulation in the near term?  Here’s why:

·        The compounds have many uses in many products and were therefore manufactured or used (and released) at a large number of facilities. Commercial products included, among others, cookware, food packaging, personal care products, and stain resistant chemicals for apparel and carpets.  Industrial and commercial uses included photo imaging, metal plating, semiconductor coatings, firefighting aqueous film-forming foam, car wash solutions, and rubber and plastics.  Sources include landfills.

·        PFASs are highly mobile and highly persistent in the environment, and so will be present for many decades.

·        The EPA Drinking Water Health Advisory level was reset (lower) in 2016 at 70 parts per trillion (ppt).

·        EPA estimates that 6.5 million people are affected by PFASs in public water systems, which does not include any impacts to smaller water systems or private wells.

·        More and more public water systems are voluntarily testing for PFASs – and more states are compelling testing.

·        Airborne releases of PFASs have contaminated groundwater and surface water.

·        They’re ubiquitous in the environment and present in human blood.  PFASs are also found in fish, and thus fish advisories are being set by states. 

·        California has proposed listing PFASs under Proposition 65 based on reproductive toxicity.

·        Many U.S. Department of Defense properties (and former properties) were the sites of PFAS releases in firefighting foam, and DOD is ramping up additional testing on its facilities.  

·        Toxic tort lawsuits have been filed over PFAS contamination in Parkersburg, WV; Decatur, AL; Merrimack, NH; and Hoosick Falls, NY. More lawsuits are likely.

·        Several Attorneys General are reportedly considering lawsuits on behalf of the citizens of their states.

It may only be the end of summer, but can you sense a snowball?

TSCA Implementation: What’s in Pruitt’s Playbook?

Posted on June 9, 2017 by Lynn L. Bergeson

Candidate Trump’s views on chemical management were not well articulated, if they were articulated at all, in sharp contrast to his views on climate change.  Whether the silence signaled support for the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg), which extensively amended the Toxic Substances Control Act (TSCA) upon its enactment last June, or something else was an open question before now.  Several developments suggest U.S. Environmental Protection Agency (EPA) Administrator Pruitt is firmly behind implementing the new law on schedule.  What is less clear is how key policy issues will be decided.

TSCA is the federal law that authorizes EPA to regulate imported, manufactured, and processed industrial chemical substances.  Lautenberg extensively amended TSCA, adding significant new definitions, expanding testing authority, regulating new and existing chemicals, expanding information reporting, narrowing confidential business information protection, and modifying preemption opportunities, among other changes.  Further information is available on our TSCA Reform website:  http://www.lawbc.com/knowledge-resources/tsca-reform-news-info.

The unexpected election results inspired considerable concern in some quarters regarding whether Lautenberg’s implementation would succumb to the anti-regulation rhetoric emanating from the Trump White House, torpedoing the hard fought gains reflected in the new law’s passage.  These fears were exacerbated with news of President Trump’s 2018 budget, which proposes a jaw-dropping 31 percent reduction in EPA funding (from $8.05 billion in 2017 to $5.65 billion in 2018).  Under this plan, 3,200 EPA employees would lose their jobs, and some 50 EPA programs would be scrapped.

To date, there has been no public change in the Office of Chemical Safety and Pollution Prevention’s (OCSPP) course of conduct regarding TSCA implementation.  Acting Toxics Assistant Administrator Wendy Cleland-Hamnett is an experienced, able leader, well respected by staff and diverse stakeholders alike. Nancy B. Beck, Ph.D., DABT, was brought on May 1 as the principal Deputy Assistant Administrator for OCSPP.  Dr. Beck holds a doctorate in environmental health and for the past five years has served as the senior director for Regulatory Science Policy at the American Chemistry Council.

The Pruitt Administration can be expected to drive EPA regulatory and science policies.  Mr. Trump is an outspoken critic in other contexts, such as with regard to climate change and Clean Water Act issues, of what he described as the Obama EPA’s “manipulated” (fake?) science to support a political outcome and, of course, vowed to “fix” this.  Under Lautenberg, EPA is required to promulgate the TSCA “framework” rules, TSCA Inventory notification, procedures for prioritizing chemicals for risk evaluation, and procedures for chemical risk evaluation,  by mid- June 2017.  It is difficult to predict how exactly the new Administration can be expected to influence the many critically important policy issues at play in these proposals.  Dr. Beck’s recent arrival at EPA, however, significantly enhances the front office’s bandwidth in science policy issues, and may suggest a policy bent decidedly more business-friendly than the proposed rules crafted under the Obama EPA.

That the Administration will seek to influence chemical regulatory policy is clear as the stakes are high and the consequences for the domestic chemical industry too great to be ignored.  How, for example, will “weight of evidence” be defined; must all “conditions of use” be included in the scope of every Section 6(b) risk evaluation; how should the “reasonably foreseen” provision in the definition of “conditions of use” be applied; will the composition of the Science Advisory Committee on Chemicals change and when?  These are just a few of the many consequential decisions that this Administration will decide concerning Lautenberg’s implementation, some of which will almost certainly be litigated.  In that the three framework rules and the scope of the risk evaluations for the ten chemical substances identified on December 19, 2016, will be out soon, we should have a much clearer sense of the chemical policies the Pruitt Administration supports.

Interesting questions also arise from application of the Executive Orders (EO) President Trump has issued with respect to their impact on TSCA implementation.  EO 13,777, Enforcing the Regulatory Reform Agenda, issued on February 24, 2017, and EO 13,771, which directs the head of every agency to designate an officer to “oversee the implementation of regulatory reform initiatives and policies to ensure that agencies effectively carry out regulatory reforms,” could significantly impact TSCA implementation.  Of particular relevance is EO 13,771, requiring that agencies identify two rules for repeal for every new regulation the agency proposes.  The imperatives of the EOs must be viewed in the context of the cold, hard fact that an expectedly unfriendly Trump Office of Management and Budget will be in charge of regulatory reviews of each regulation, and significant EPA policies.  Application of the EO to the TSCA implementation could burden the Office of Pollution Prevention and Toxics’ already strained resources to an unsustainable degree, hamper its ability to devote its limited resources to implementing the new law, and seriously disrupt the chemical manufacturing community by holding hostage urgently needed new chemicals.  EPA is urged to stay focused and on target as failure to implement the new law timely and credibly will invite an erosion of the trust the public was beginning to place in the federal government’s ability to manage chemical risks since Lautenberg’s bipartisan enactment.

Taking Aim at Toxic Ammunition

Posted on February 3, 2017 by Stephanie Parent

On his way out the door, former Director of the U.S. Fish and Wildlife Service Dan Ashe issued an order to establish procedures and a timeline for expanding the use of nontoxic ammunition and fishing tackle to conserve wildlife. The order sets forth policy to require the use of nontoxic ammunition and fishing tackle “to the fullest extent practicable” for all activities on Service lands, waters and facilities by January 2022, except as needed for law enforcement or to address health and safety issues.  The order also provides for collaboration with state fish and wildlife agencies in its implementation.

In addition to continued education and research, Ashe set forth three basic steps to achieve this policy. To provide more consistency, the Service is to identify existing state, Federal or tribal requirements to use nontoxic ammunition or tackle and, through amendment of Service hunting and fishing regulations, to apply and enforce those requirements on Service lands. Second, Regional Directors must take steps to require the use of nontoxic ammunition and tackle when available information indicates that the lead content negatively impacts sensitive, vulnerable or trust resources. It also directs the Service, in consultation with National Flyway Councils, to establish a process to phase in the use of nontoxic ammunition for hunting mourning doves and other upland birds. In other words, the order is a measured plan to be implemented through collaboration, consultation and rulemaking over the next five years.

The phase-out of lead ammunition is nothing new. The Service phased out the use of lead shot for hunting waterfowl starting in 1986, but rejected an alternative that would have extended to all migratory bird hunting based on insufficient data. For decades, scientific evidence regarding the detrimental effect of lead ammunition on wildlife has been mounting. A recent Service assessment concluded that numerous lines of evidence in the scientific literature point to spent lead ammunition as the primary pathway for widespread lead exposure to scavenging birds such as bald and golden eagles and the California condor in the United States, that reducing this route of exposure will result in the greatest alleviation of mortality and other adverse effects to these species from lead in the environment, and that lead can be replaced in ammunition by alternative metals that are currently available and present limited environmental threats.

Unfortunately, Ashe’s timing was terrible. Predictably, the National Shooting Sports Foundation and the National Rifle Association characterized the order as government overreach, unchecked politics and not based on sound science. They called for the next Director to rescind the order, and Representatives Jason Chaffetz and Blake Farenthold, Chairman of the House Subcommittee on the Interior, Energy, and the Environment, have instructed the Acting Director of the U.S. Fish and Wildlife Service to produce all documents referring or relating to issuance of the order by February 13, and to provide a briefing on the Service’s outreach efforts to the states and the “sportsmen’s community” in anticipation of the order’s issuance. Montana Congressman Ryan Zinke, poised to become U.S. Secretary of the Interior, is likely to ensure that the order is very promptly rescinded.

Waterfowl hunters have successfully used nontoxic shot for over twenty-five years. Absent further leadership from the U.S. Fish and Wildlife Service, some states are phasing out lead ammunition. Hunters currently have a reasonable choice to avoid unintended harm – wildlife does not.

The Toxic Substances Control Act Amendments May Do Little to Relieve California Headaches for Businesses

Posted on July 15, 2016 by Robert Falk

Business groups largely supported the Toxic Substances Control Act (TSCA) Amendments recently signed into law by President Obama to address concerns about the emergence of varying state-by-state requirements regulating the chemicals used in consumer products.  But for those wishing to avail themselves of California’s vast and lucrative marketplace, the TSCA Amendments and EPA’s June 29, 2016 plan to begin implementing them may prove to do little to alleviate business’s headaches.  While the TSCA Amendments include a number of permanent and temporary federal preemption provisions, they are riddled with holes that may allow California’s activist requirements and plaintiffs’ lawyers to proceed largely unimpeded.

Potential Impact of the TSCA Amendments on California’s Safer Consumer Products (“Green Chemistry”) Program

The Amendment’s preemption provisions could halt or constrain the implementation of the California Safer Consumer Products (SCP) program.  The statutory basis for California’s so-called “Green Chemistry Initiative” was enacted just after August 31, 2003 and its initial requirements for Priority Product-chemical pairings were not finalized prior to April 22, 2016 so at least certain types of requirements arising from the SCP program may be subject to TSCA preemption. 

But whether these preemption provisions will have a meaningful effect on the future of the SCP program remains to be seen.  For example, as long as EPA has not taken any regulatory action on a chemical, California will retain full authority to regulate a product that contains it.  Moreover, if the use of the chemical does not fall under EPA’s TSCA jurisdiction, the SCP program’s actions concerning it will never be preempted.  (For instance, TSCA does not cover personal care products or beauty products.)

Indeed, California’s requirement that manufacturers of products designated as Priority Products provide the state with data and conduct an Alternatives Analysis pursuant to the SCP program appears to be left unaltered by the new TSCA preemption provisions.  Likewise certain forms of regulatory responses to an Alternatives Analysis on a Priority Product, such as mandating certain warnings or other information disclosure requirements, may well be found to survive TSCA preemption. 

Potential Impact of the TSCA Amendments on California’s Proposition 65

Proposition 65 requires businesses to provide a “clear and reasonable” warning before knowingly and intentionally exposing a Californian to any detectable amount of a listed chemical unless the business can prove that the exposure level does not pose a significant risk of cancer or is at least 1,000 times below the level which causes no observable reproductive effect.  Public prosecutors are meant to be the primary enforcers of Proposition 65, but the statute is most loathed because any individual claiming to act in the public interest also has the ability to enforce it by filing “bounty hunter” lawsuits against manufacturers, distributors, and retailers of consumer products. 

California’s federal legislators, including retiring U.S. Senator Barbara Boxer, took pains to ensure that Proposition 65, which was enacted in 1986, remained fully shielded from TSCA preemption.  Thus, California can continue to update its list of Proposition 65 chemicals “known” to that State to cause cancer and reproductive harm regardless of the outcome of EPA’s TSCA evaluation on the same chemical.  Proposition 65 bounty-hunter lawsuits can also continue to be filed concerning even the most de minimis exposures to chemicals that EPA determines are safe. 

That said, it still remains for the courts presiding over Proposition 65 cases to determine if EPA’s risk and safety determinations made pursuant to TSCA will have a significant evidentiary role in a business’s defense of a Proposition 65 claim on grounds other than preemption.  California judges may also take EPA’s TSCA determinations about a chemical into account when it comes to assessing (or reducing) Proposition 65 penalties.  And, perhaps at best, TSCA’s preemption provisions may also help convince courts that it is inappropriate to allow plaintiffs to continue to use Proposition 65 to obtain chemical “reformulation” of products made for a national or international market instead of just requiring Proposition 65 warnings for them when offered for sale in California.

A Reformed TSCA: Let the Questions Begin

Posted on July 7, 2016 by Lynn L. Bergeson

Toxic Substances Control Act (TSCA) legal practitioners and every American interested in chemical safety celebrated President Obama’s signature Wednesday, June 22, 2016, of H.R. 2576, the Frank R. Lautenberg Chemical Safety for the 21st Century Act.  The bill extensively amends TSCA, the federal chemical management law, and President Obama’s signature made the Act immediately effective.  The amendments go a long and comforting way in fixing what was wrong with TSCA, and empower the U.S. Environmental Protection Agency (EPA) to identify and manage chemical risks more efficiently and effectively.

EPA wasted no time in beginning the challenging task of implementing the new law, and on June 22, rolled out a web page on the new law.  EPA’s web page includes links for users to access:  the text of the new law; answers to frequently asked questions (FAQ) on the new law; a brief summary of the provisions found in the new law; and Administrator McCarthy’s blog post -- TSCA Reform:  A Bipartisan Milestone to Protect Our Health from Dangerous Chemicals. 

On the whole, the new TSCA is vastly improved and, if implemented smartly, will make good on fulfilling the promise to make TSCA a truly muscular law that ensures chemical safety and public health.  While there are many, many implications of the law’s enactment, its most immediate effect will be on the new chemicals review process.  Under old TSCA, entities wishing to bring a new chemical or significant new use of an existing chemical (new chemical) to market submitted a notification and, if the 90-day review period lapsed without notice from EPA, commercialization could occur as permitted under the conditions of the notification.  Speed to market and predictability are critical to innovation and business equilibrium.  Under new TSCA, EPA must make one of three affirmative determinations:  (1) that the new chemical presents an unreasonable risk; (2) that there is insufficient information on the new chemical to decide, or, in the absence of sufficient information, that it may present unreasonable risk, or that the substance is produced in substantial qualities and can be expected to enter the environment or pose substantial exposure risks; or (3) that the new chemical is not likely to present an unreasonable risk.

For new chemicals in the review process on June 22, TSCA Section 26 gives EPA discretion to apply old TSCA to pending notifications not yet “dropped” from EPA review.  Importantly, EPA has interpreted this provision and notes on its new webpage “[f]or companies that submitted premanufacture notices (PMNs) prior to enactment and which are currently undergoing review, the new law effectively resets the 90-day review period.  The agency will make every effort to complete its review and make a determination within the remaining time under the original deadline.  EPA will be making additional information available on new chemical reviews in the very near future.”

EPA has the discretion to proceed in this way, but a preferred interpretation would have been to continue to apply the old TSCA provisions to pending cases for some time period into the future.  While clarity is welcomed, the more flexible alternative reading would have allowed for a smoother and more measured transition.  The take away here is that pending notifications will have their 90-day clocks reset (it is not entirely clear from what date the clock restarts), and submitters will need to recalibrate their delayed commercialization trajectory accordingly.  More information is available in the Bergeson & Campbell, P.C. (B&C®) memorandum TSCA Reform: An Analysis of Key Provisions and Fundamental Shifts in the Amended TSCA and in the new B&C blog TSCAblog.com.

Close but No Cigar

Posted on May 25, 2016 by Lynn L. Bergeson

As divisive as Congress is, Members miraculously seem to agree that our chemical management law, the Toxic Substances Control Act (TSCA), needs modernizing.  On May 6, the key Members of the Senate announced that they had reached agreement on draft TSCA reform legislation; the House is expected also to act soon, perhaps before Memorial Day.  This means that TSCA, our chemical control law enacted almost 40 years ago, could be significantly modernized this year -- a goal that has proven to be uniquely elusive.  Many believe that TSCA’s greatest failing, and the deficit that most undermined the public’s confidence in the U.S. Environmental Protection Agency’s (EPA) ability to assure chemical safety, is EPA’s limited authority under TSCA to regulate “existing” chemical substances believed to pose risks.  Pending TSCA reform legislation that is supported by an unusually broad group of stakeholders would strengthen EPA’s authority and address this failing.  Consensus on the contentious issue of preemption has proven especially challenging as many states are aggressively enacting chemical-specific measures, have been for years, and do not wish to cede authority to EPA.  Now that the Senate has reached agreement, the hope is the House can also agree quickly as time is running out.  TSCA reform is urgently needed.  Congress has never been this close to making it happen, and while we are not there yet, Congress seems poised uncharacteristically to make the right choice.  Tobacco products will still not be subject to TSCA jurisdiction, but celebrations will be in order if this elusive milestone is finally reached.

Developments in the Science of PCBs

Posted on November 13, 2015 by Angus Macbeth

For those of you who are becoming exhausted by the opinions in the Fox River case, it is time to suggest that the fundamental underpinning of the case – the toxicity of PCBs to humans and to fish – may be in jeopardy.

Twice under the auspices of the World Health Organization “consensus toxicity factors” for dioxin-like compounds including PCBs have been published. These factors were based on analysis of laboratory animals, typically rodents. The lead author of both reports was Martin van den Berg.

Recently an article was published in Chemical Research in Toxicology, “Consensus toxicity factors for PCPDs, PCDFs, and PCBs combining in silico models and extensive in vitro screening of AhR-mediated effects in human and rodent cells,” where van den Berg was the second author on the article who reported on the results of dosing human cells with PCBs and found that PCB 126 was the only PCB congener that produced a measurable response from human cells and that the result was more than 30 times lower than the WHO TEF value for PCB 126. Similar results have been reported in other papers.

As to fish, T.B. Henry has recently published analysis  in Critical Reviews in Toxicology , “Ecotoxicology of polychlorinated biphenyls in fish – a critical review.” He concludes: “Biological activity of PCBs is limited to a small proportion of PCB congeners [e.g., dioxin-like PCBs…] and occurs at concentrations that are typically orders of magnitude higher than PCB levels detected in wild fish… Overall, there appears to be little evidence that PCBs have had any widespread effect on the health or survival of wild fish.”

What would the District Court and the Seventh Circuit make of this adjustment to the facts of the case?

Whither TSCA: To Reform or Not to Reform (and if so How) — That is the Question

Posted on March 31, 2015 by Donald Stever

Way back around the turn of the decade from the ‘70s to the ‘80s I was invited by the International Joint Commission to attend a conference in Montreal to discuss whether the Canadians should adopt a statute similar to the Toxics Substances Control Act of 1976 (“TSCA”). The IJC is a largely advisory US-Canadian body whose primary area of interest is the Great Lakes. Also on that delegation was the principal author of the text of TSCA, Clarence (“Terry”) Davies. I did not win many friends on that trip when I argued that TSCA took the wrong approach to regulating chemicals in the stream of commerce and in the environment primarily because it used an inappropriate cost-benefit premised standard of review. I also argued that TSCA’s standards were simultaneously too vague and too complex. I suggested that the Canadians start afresh.

In the years following, Congress ignored repeated calls for significant amendment or replacement of TSCA, including a chorus of suggestions that it be replaced by a statute resembling the European Community’s chemical regulatory regime, REACH. In the meantime, EPA soldiered along, trying to make the best of enforcing an antiquated and fundamentally flawed regulatory statute. 

Now after all these years we have two competing bills in the Senate, each of which purports to “reform” TSCA. On the one hand we have S.697, the “Frank R. Lautenberg Chemical Safety for the 21st Century Act”, an allegedly “bipartisan” effort co-sponsored by Senators Mark Udall (D-N.M.) and David Vitter (R-La.), the first hearing on which was held on March 18th. And from another corner, we have S.725, the “Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act”, co-sponsored by Senators Barbara Boxer (D-Calif.) and Ed Markey (D.Mass.). At about 175 legislative pages, these bills aren’t capable of being thoroughly analyzed in a blog.

The Udall bill is tepidly supported by the chemical industry and by at least one environmental group, the Environmental Defense Fund. It is opposed by some other environmental and public safety advocacy groups. It would pre-empt state chemical regulatory programs like California’s Proposition 65 and other state-run chemical regulatory programs in California and Washington. The Boxer bill, predictably, because its principal sponsor is from California, preserves state programs. Both bills in one degree or another attempt to address the core problems with TSCA by changing the standard of review to a risk-based standard, overhauling and strengthening EPA’s information gathering authority on hazard, exposure and use data, and prioritizing chemicals for review. The Udall bill throws a bone to the chemical industry by exempting a wide variety of chemicals considered to be of low exposure potential or low risk. 

I confess that, although I am not a policy wonk, I have an interest in these bills partly because if either — or a significant element of either — is enacted into law I will have to re-write an entire chapter of The Law of Chemical Regulation and Hazardous Waste. My guess is that, given Congress’s track record of doing little or nothing over the last few years, I won’t have to worry about getting writer’s cramp any time soon.

TSCA Reform: Dead for Now

Posted on July 18, 2014 by Lynn L. Bergeson

Despite high hopes earlier this year for the promise of a legislative make-over, Toxic Substances Control Act (TSCA) reform measures are dead, certainly for the remainder of this Congressional session and possibly the next.  In the category of all things happen for a reason, maybe there is a silver lining to this disappointing result.

TSCA is among the oldest federal environmental laws, one of the most neglected, and clearly one of the most complex and divisive.  At the ripe old age of 38, TSCA’s elasticity has proven remarkable given the tremendous technological advancements made in the chemical manufacturing sector over the past four decades.  In other respects, however, TSCA is impossibly ill-suited to address advancements in risk identification, assessment, and management, societal changes that have profoundly recalibrated consumer expectations, and a more muscular role for states, especially forward-thinking ones like California.

The TSCA reform debate has focused on a handful of tough issues -- preemption, safety standard/risk management, and prioritization of existing chemicals.  Preemption tends to dwarf other issues and how amenable preemption is to resolution has been made all the more challenging given the implementation of the California Safer Consumer Products Regulations (SCPR), which went into effect last October.  The SCPR truly are game-changers and require consumer product manufacturers to assess the safety of chemicals in consumer products by mandating chemical substance “alternative” assessments to ensure products marketed to consumers contain chemical components least likely to cause risk to human health and the environment.

TSCA reform in the shadow of a Presidential election and a new Congress, the composition of which is anything but clear, makes meaningful predictions impossible.  A question worth pondering is not when TSCA will be amended, but whether we bother at all.  The European Union Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) chemical management model, like it or not, is firmly embedded in multiple jurisdictions, and has already triggered massive changes and product deselection in the chemical sector.  The California SCPR are in place and with each passing day are becoming the default standard against which product formulation is being measured, fueled in no small part by a retailer imperative that directionally is joined at the hip with the California approach of “just get rid of the bad stuff.”  Given Congress’s attention span, the better part of valor may be to direct Congress’s limited attention to climate change and give up on TSCA reform.

Carbonless Copy Paper Does Not Always Produce a Carbon Copy

Posted on October 22, 2013 by Linda Benfield

In 2009, CERCLA practitioners were thrilled to finally have a new Supreme Court case to work and play with.  Even better, Burlington Northern & Santa Fe Railway Co. v. United States, 129 S. Ct. 1870 waded into the murky area of “arranger” liability.  However, two recent cases addressing the potential arranger liability of NCR for the same business practices but at two separate sites, and both relying on Burlington Northern, illustrate that in this area the Supreme Court has just given us more language to argue about.

Both cases addressed the same business arrangements:  NCR’s sale of a PCB emulsion to paper coaters, their sale of coated paper back to NCR, and the resulting contamination when recyclers deinked the paper and released PCBs into major water bodies from 1954 to 1971.  The cases even relied upon the same language from Burlington Northern – that “an entity may qualify as an arranger … when it takes intentional steps to dispose of a hazardous substance.” 

However, with respect to the PCB cleanup of the Fox River, the federal district court for the Eastern District of Wisconsin held that NCR had “knowledge alone” and was not liable as an arranger.  The court found that even though NCR knew that remnants - “broke” - contained the emulsion and released PCBs when recycled, “there was no evidence that NCR had any purpose in selling its emulsion to [a coater] other than to produce a commercially viable product.  Broke was simply not part of the equation.”  This court viewed the arrangements as the sale of a useful product. Appleton Papers Inc. and NCR Corporation v. George A. Whiting Paper Co.  Across Lake Michigan and 15 months later, the federal district court for the Western District of Michigan held the opposite - that NCR was liable as an arranger for the PCB cleanup of the Kalamazoo River.  The court focused on NCR’s efforts to encourage recycling of the broke, and found that “not later than 1969, NCR understood the  … broke .. was no longer anything but waste and was no longer useful to any paper recycler who understood the true facts as NCR did.” Georgia-Pacific Consumer Products LP, et al, v. NCR Corporation, et al.  Given the size of the cleanup bills in both rivers, keep an eye out for the appellate decisions.

Live from California! The Safer Consumer Products Regulations Are Now In Effect

Posted on October 18, 2013 by Lynn L. Bergeson

The long awaited and highly controversial California Department of Toxic Substances Control (DTSC) Safer Consumer Products Regulations (SCPR) took effect October 1, 2013.  These are not your garden variety regulations.  They are intended to promote the inclusion in consumer products of chemicals deemed safer than the chemicals they are replacing and, by reverse logic, encourage the deselection of chemicals for inclusion in consumer products believed to pose risk to human health and the environment.

The regulations establish a four-step process whereby DTSC develops a list of candidate chemicals of concern, develops a list of “Priority Products” containing candidate chemicals, requires manufactures and other responsible entities to notify DTSC and assess potential product component alternatives, and implements regulatory responses that could result in mandated product reformulation or even product cancellation.  Certain “trade secret” provisions in the regulations are still being developed, important provisions considering the context of the regulations.

DTSC has created a Safer Consumer Products Web Portal and has posted, and will continue to add, information pertinent to the regulations and various guidance materials.  Litigation challenging the regulations is almost certain, arising under the California Environmental Protection Act, Administrative Procedure Act, and Commerce Clause, among other authorities.  Relying on a favorable outcome in any such challenge and doing nothing now is unwise, as success is at best speculative and more likely optimistic.

These are game-changing new rules.  They are certain to have a global impact on, and influence profoundly and forever, the supply chains of consumer product manufacturers, suppliers, and distributors.  Because the regulations are likely to become the new global standard against which prudent business practices regarding the manufacture, distribution, and marketing of consumer products will be measured, careful review is needed regardless of whether or not you are marketing consumer products in California.

Illicit PCB Dumping Prompts Emergency Regulation

Posted on October 1, 2013 by Thomas Lavender

On September 25, 2013 the South Carolina Department of Health and Environmental Control (SCDHEC) filed an emergency regulation in response to multiple occurrences of illegal dumping of substances containing polychlorinated biphenyls (PCBs) into multiple sewer systems across the State. The Emergency Regulation took effect immediately upon filing and remains in effect for ninety (90) days.  SCDHEC acknowledged the existence of an ongoing investigation into the origin of the materials, including state and federal authorities.  SCDHEC noted that there was currently no known impact to public health or any confirmed discharge to surface water bodies.  It is also believed that publicly-owned treatment works (POTWs) in states bordering South Carolina have recently detected PCBs in their systems.

In August, SCDHEC had acknowledged that PCBs had been detected in several POTWs in the Greenville-Spartanburg area of the State.  Concurrent with the filing of the Emergency Regulation, the agency announced that PCBs had now been detected in a POTW in the Columbia, SC area.

Some South Carolina wastewater treatment systems are permitted for the land application of their sludge.  Based on the suspected criminal activity, DHEC has determined the need for specific regulations limiting the land application of sludge containing detectable levels of PCBs.  The Emergency Regulation addresses the land application of sludge from wastewater treatment systems and specifically limits land application to sludge containing no detectable levels of PCBs and requires increased testing of sludge, regardless of disposal method, to aid in identifying illegal dumping suspects.  SCDHEC has also informed all of the state’s class III landfill operators and waste water treatment plants of the matter, and provided them guidance regarding proper disposal and reporting any suspicious activity.

SCDHEC issued a Be On the Lookout (BOLO) alert through the State Law Enforcement Division to heighten awareness among law enforcement of illegal dumping and solicit the help of local law enforcement agencies.

Fourth Circuit Rules CERCLA Preempts State Statute of Repose

Posted on July 22, 2013 by Daniel Riesel

On July 10, 2013, a divided Fourth Circuit Court of Appeals held the Comprehensive Environmental Response, Compensation and Liability Act’s (“CERCLA’s”) federally-mandated commencement date preempts not only state statutes of limitations but also statutes of repose, an issue that has split federal courts and left considerable uncertainty about the timeliness of claims arising under CERCLA and environmental common law.

One of the unique aspects of CERCLA is that it imposes a universal statute of limitations on toxic torts and other state law claims for damages “caused or contributed to by exposure to any hazardous substance or pollutant or contaminant.”  42 U.S.C. § 9658(b)(4).  This statute of limitations runs from the time the plaintiff discovers, or reasonably should have discovered, the cause of the injury or damages.  CERCLA expressly preempts state statutes of limitations that set an earlier commencement date, such as the date of the tortious conduct or the date of the injury.       

CERCLA’s “federally required commencement date” has generated considerable commentary and confusion, with federal courts split over the scope of CERCLA’s preemptive effect.  One particularly divisive issue involves whether CERCLA preempts state statutes of repose, which are separate from statutes of limitations.  Statutes of repose generally provide a longer period in which to file a claim, but they cannot be tolled and often begin to run earlier as well.  Noting that the federally required commencement date under CERCLA refers only to “statutes of limitations,” the Fifth Circuit has held “the plain language of [CERCLA] does not extend to statutes of repose.”  Burlington N. & Santa Fe Ry. Co. v. Poole Chem. Co., 419 F.3d 355, 362 (5th Cir. 2005).

In Waldburger v. CTS Corporation, 2013 WL 3455775 (4th Cir. July 10, 2013), the Fourth Circuit adopted the contrary position, finding the relevant text of CERCLA to be ambiguous and interpreting it to preempt a North Carolina statute of repose.  Reversing the United States District Court for the Western District of North Carolina, the Fourth Circuit held that courts and lawmakers have often used the terms “statute of repose” and “statute of limitations” interchangeably, and that the application of CERCLA’s federal discovery rule was more consistent with the statute’s remedial purpose.  It therefore held a state repose period that required real property claims to be filed within 10 years of the tortious action did not apply to a nuisance claim alleging the discovery of groundwater contamination several years after the final alleged discharge.  In dissent, Judge Stephanie Thacker argued that, “the plain and unambiguous language of § 9658 indicates only statutes of limitations were intended to be preempted.” 

The Waldburger ruling will benefit plaintiffs harmed by the latent effects of environmental contamination, who may not become aware of their injuries until after a state statute of repose has run.  Such plaintiffs must exercise reasonable diligence, however, to establish they did not have reason to know of the harm at an earlier date. 

French Government Requires Annual Reporting of Nanoparticles

Posted on March 12, 2013 by Leslie Carothers

Over a year ago, I commented on the continuing discovery of new commercial uses for nanomaterials—particles at the scale of one billionth of a meter—and the continuing delay in developing better means of governmental oversight to manage any health and environmental risks.  Since then, several new steps in regulatory oversight have been taken, most notably in Europe. 

Here in the United States, EPA has employed the significant new use rule or SNUR under Section 5 of the Toxic Substances Control Act with respect to a number of nanomaterials undergoing premanufacture (PMN) review, its most recent pronouncement being the proposed application of SNURs to 14 carbon nanotube materials as published in the February 25, 2013 Federal Register.  78 Fed. Reg. 12684-12701.  Such SNURs can impose restrictions and conditions on the production, import, and use of a pmn chemical containing nanomaterials.  These requirements generally address worker protection and may also limit production unless releases to water are prevented or further testing of health or environmental impacts is performed.  See, e.g. the December 28, 2011 proposed rule establishing SNURs for seven nanomaterials.  76 Fed.Reg. 81447-81462.     

European regulators have traditionally been less reluctant to request chemical information or regulate chemical constituents than their U.S. counterparts.  The European Union’s REACH law governing chemicals, both new and in use, illustrates the EU’s willingness to impose significant information reporting.  The EU is also more inclined to require broader disclosure of information to the public in the form of product labeling, and the European Commission has set labeling requirements for the use of nanomaterials in food.  The new rule, effective in 2014, adds a definition for “engineered nanomaterials” at Article 2(t), and Article 18.3 requires that all ingredients in the form of engineered nanomaterials be clearly indicated with the word “nano” in brackets after the ingredient name.  Paragraph 25 of the rule’s preamble also notes the possibility that nanomaterial content will result in a “novel food” under the current rule generally known for its coverage of genetically modified organisms.  (Revision of the novel food rule has been delayed by an interesting dispute over whether food from the offspring of cloned animals should be categorized as “novel.”  Further delay is likely while EU regulators grapple with exotic equine ingredients.)

France has taken another step in the regulation of nanomaterials by adopting the first mandatory reporting scheme beginning in January 2013, with the initial annual report due May 1.  The French decree (Decree No. 2012-232) requires manufacturers, importers, distributors, and research and development laboratories using quantities of 100 grams or more to submit an annual declaration identifying the quantity and use of substances with “nanoparticle status” under the EC’s definition set forth in the REACH (Registration, Evaluation, Authorization and Restriction of Chemical Substances) regulations.  Companies exporting to France presumably will have to provide the information so that importers can comply with the new requirement.

Implementation of the French reporting program may well provide valuable information to U.S. regulators on whether and how a reporting rule can strengthen governmental oversight without unduly burdening commercial introduction of new and potentially beneficial materials.

Will EPA Expand TRI to the Oil and Gas Extraction Sector?

Posted on March 1, 2013 by Molly Cagle

The Environmental Protection Agency (EPA) is planning a rulemaking to expand its Toxic Release Inventory (TRI) program in March 2013. Will the oil and gas extraction sector be included in the program’s expansion?

As part of the Emergency Planning and Community Right-to-Know Act (EPCRA), the TRI program gathers and makes public information about chemical and waste management activities at a wide variety of facilities. EPA touts TRI reporting as one mechanism to reduce the release of chemicals into the environment. It claims that the information gathered helps companies keep up with competitors’ efforts to reduce and recycle waste, and that the public dissemination of information can lead to citizen and EPA enforcement.

EPA considered including the oil and gas extraction sector in TRI in 1997, but decided against it due to technical issues in determining whether individual wells spread out over large geographic areas would be considered a “facility” under EPCRA. A petition filed by environmental groups claims these technical issues are resolved and points to the basin-level definition of facility in EPA’s greenhouse gas (GHG) reporting rule as an example of how oil and gas production operations can be aggregated. Meanwhile, the GHG reporting rule is still under administrative reconsideration and the definition of facility under that rule is a key point of contention between EPA and industry.

As recently as last week, EPA’s Inspector General “recommend[ed] that EPA develop and implement a comprehensive strategy for improving air emissions data for the oil and gas production sector.” If oil and gas production is included in TRI, how will it affect the sector? Will it be a way to get at chemical ingredients used in hydraulic fracturing that are otherwise protected from disclosure as trade secrets? Will the aggregation of data for TRI purposes spill over into air and waste permitting decisions? At a minimum, TRI would require industry to gather more information on chemicals, wastes and emissions and make it publicly available. Thus, industry should prepare for the corresponding public attention and regulation that may accompany TRI expansion.

TSCA Reform: The Battle Continues

Posted on February 7, 2013 by Lynn L. Bergeson

For Toxic Substances Control Act (TSCA) aficionados, a new federal legislative session holds the promise of long overdue legislative reform.  Among the oldest environmental laws, it is also the most neglected.  While hope springs eternal, the odds are against reform any time soon.  A deeply divided Congress makes any environmental measure contentious.  Pile on other Congressional priorities, including immigration reform, gun safety, and climate change, and we have the makings of more Congressional inaction and gridlock.

It is against this backdrop that we await introduction of Senator David Vitter’s (R-LA) TSCA reform bill, expected this month.  As the new ranking Republican on the Senate Environment and Public Works Committee, Senator Vitter’s much-awaited bill marks the first Republican alternative to Senator Frank Lautenberg’s (D-NJ) long-standing TSCA reform measure, the Safe Chemicals Act.

Among many contentious issues is the TSCA safety standard.  Senator Lautenberg’s bill contains a “reasonable certainty of no harm” standard to replace the current “unreasonable risk” standard.  This language is found in the 1996 Food Quality Protection Act and defines the applicable standard for pesticide exposures in food.  A key area of controversy is whether such a standard for food safety is appropriate for chemical exposures, or otherwise represents a “zero risk” standard that likely would inspire epic regulatory costs for questionable improvements in true risk reduction.  In the void left by Congressional inaction, state measures are gaining ground.  The California Safer Consumer Products Regulations are expected to be issued in final form sometime this year.  This game-changing approach to assessing the safety of chemicals in consumer products by requiring chemical “alternative” assessments may well become the default safety standard in the absence of federal legislation.

2013 will be a watershed year for domestic chemical management initiatives.  Even if federal inaction continues, a California initiative, like so many others in the past, may prevail and take domestic chemical product safety to places and levels Congress declines to go.

The Frankenstorm Triple Whammy

Posted on November 12, 2012 by Robert M Olian

Those environmental lawyers who had a two- or three-day “vacation” due to Hurricane Sandy now return to the office to face a workload that will in many cases be trebled. First, there’s the work you didn’t get to when your office was closed and now has to be finished post-haste. Second, there’s the work that you would have been doing the next few days had there been no hurricane. And third, there’s the urgent work that you now have to help your clients assess new issues that are present precisely because of the storm.

Wind and water mobilize even structures, equipment and materials that were always meant to be stationary. Storage tanks, waste ponds, drums, hazardous materials and other previously contained environmental hazards have now been released, flooded, or overtopped, often releasing reportable quantities of material. Clients will need to quickly assess the nature and magnitude of releases at and from their facilities to determine their environmental obligations.

The prudent environmental lawyer will immediately begin working with clients to determine whether there are spills and releases that must be reported to federal, state and local environmental agencies. Potential liabilities may depend upon whether under the applicable laws “Act of God” is or is not a defense.  Surprisingly, a major hurricane is not, in the eyes (pun intended) of some agencies interpreting some statutes, an Act of God. Clients also need to verify that their pollution control systems – wastewater treatment, air pollution, etc. – are functioning correctly post-storm, even if there were no reportable releases during the storm.

Clients are undoubtedly attuned to the need to submit insurance claims for business interruption and damage to their own property, but now is a good time to begin surveying what kinds of claims might be coming from neighbors and others damaged by releases from the client’s facility. This is particularly so given that we are nearing year-end and many policies no longer have “tails” for notices of claims received after the policy year has run.

The Ongoing Legacy of Rachel Carson’s Silent Spring

Posted on October 3, 2012 by Drew Ernst

2012 marks the 50th anniversary of Silent Spring, one of the first books to point out the environmental dangers associated with pursuing technological and scientific advances without fully understanding their possible negative side effects. Silent Spring was a revolutionary environmental exposé published in 1962 by an unassuming author, Rachel Carson.  Her book inspired a powerful social movement that continues to impact environmental law and American society today.

A scientist and ecologist, Carson was a former editor of U.S. Fish and Wildlife Service publications and a feature writer for the Baltimore Sun who eventually dedicated herself to writing books that taught people about the fragile beauty of Earth’s ecosystem. Silent Spring was written in the wake of post-war lethargy, new affluence and during a time when Americans were confident science had all the answers.  Disturbed by the proliferate use of synthetic chemical pesticides after WWII, Carson challenged this practice and sounded a loud warning about the use of chemical pesticides, a reminder of the responsibility of science and the limits of technological progress.

Critics called Carson an alarmist, and Silent Spring was met with intense rebuttals from the scientific establishment and some major industries.  Regardless, Carson was steadfast in her resolve to show the need for new environmental policies and regulations necessary to protect human health and the environment.

Silent Spring is proof of the power of public opinion, and despite scientific skeptics, the book sparked a major environmental revolution.  Carson’s exhaustive environmental calculations in Silent Spring brought to light the fact that people were subjecting themselves to slow poisoning by the misuse of chemical pesticides and toxic pollutants that take more than 15 years to break down. In addition, she exposed the fact that these chemicals could cause irreparable liver and nervous system damage, cancer and reproductive issues. 

Carson’s testimony before Congress in 1963 later served as the catalyst for the ban on the domestic production of DDT and sparked a grassroots movement demanding better environmental protection and increased regulation, resulting in the formation of the U.S. Environmental Protection Agency (EPA).

Sadly Carson was not able to enjoy the fruits of her labor. She died after a long battle with breast cancer in 1964, just 18 months after her testimony before Congress.  However, many celebrate the impact of her work on April 22 each year on Earth Day.

So after 50 years, how much has changed?  Today, there is federal regulation of  everything from coastal development to farming practices. Environmental protection includes policies concerning natural resources, human health, economic growth, energy, transportation, agriculture, industry and international trade and all parts of society.   Many would say there is over regulation today.  In many cases, I agree.  However as Rachel Carson showed us, there is a need for some regulation, if just to protect us from ourselves.

Federalism can be Messy -- BPA and Product Regulation in the States

Posted on September 27, 2012 by Kenneth Gray

Depending on how you count, advocates have led over 25 state legislatures or regulators to consider or adopt bans on certain uses of Bisphenol A (BPA), the recently publicized monomer that is (or was) present as a residual at low levels in some plastic products.  Recently, the U.S. Food and Drug Administration (FDA) accepted a petition from the American Chemistry Council banning use of BPA in baby bottles and sippy cups, because the use had been abandoned by manufacturers. 

For many, FDA’s scientific review of BPA studies and thoughtful analysis on the merits of regulation was too slow, and to those who conclude “I don’t want exposure to any substances of concern” use-by-use regulation did not (and will never) provide comfort.  What started as a concern in baby bottles and sippy cups, and was the subject of numerous state bans several years ago -- before the FDA acted this summer to acknowledge the abandonment of BPA in those bottle and sippy cups -- is more recently the subject of additional state proposals for bans from lids of food cans and containers.  Some ask: “Can you please ban it from any product that may reach my children?”

Because it is difficult to get the federal machine to act quickly, why not seek an audience in your state capital?  It is easier to file legislation in many states than in Congress, easier to get exercised citizens to the state capital, easier to involve local media looking for a controversy, and cheaper for citizens to play at the state level than in Washington.  However, state toxicologists and regulators often don’t have the resources of the FDA, they are often not as well equipped (and certainly not as experienced) in making the necessary risk evaluations and product regulations.  And putting environmental police in the grocery aisles seems to squander limited state environmental resources.  As Maine DEP Commissioner Patricia Aho recently put it: “We’re environmental regulators.  You’re asking us to be the FDA in some regards here.”

Even assuming states are equipped to address those issues, how can national manufacturers (or national or regional retailers) deal with state-by-state regulation of different products using the same materials?  Not very well!  And how are consumers to understand why chemicals in a product present acceptable risks in one state, but unacceptable risks in another?  They don’t.  Why is state-by-state regulation of chemicals in products in the national interest when FDA has jurisdiction?  Maybe it isn’t. 

Congressman Markey has petitioned the FDA for a federal ban on coatings in infant formula packages (arguing abandonment), and the federal agency has sought comment.  But that petition was made after extensive state efforts against use in baby bottles and sippy cups.  The FDA will consider the matter, so it may be some time before the FDA acts.  In the interim, states are still being encouraged to adopt their own bans on certain uses of BPA.

FDA is even more broadly considering BPA safety and its uses under FDA jurisdiction, but in the meantime, keep your eye on your local legislature if you want to watch a messy process that is frustrating for everyone.

SNURs + Articles = Commercial Confusion

Posted on July 11, 2012 by Lynn L. Bergeson

The Toxic Substances Control Act (TSCA) regulates chemicals.  It also regulates chemicals in articles, a little known fact that gives rise to big headaches.

TSCA defines an article as a manufactured item that is formed to a specific shape or design.  Articles include an enormous array of items, ranging from car bumpers to electronic devices.  While the U.S. Environmental Protection Agency (EPA) has used its TSCA authority to regulate articles, it has done so sparingly.

As part of its Enhanced Chemical Management Program, EPA recently proposed Significant New Use Rules (SNUR) for five groups of chemicals (certain PBDEs, HBCD, benzidine-based chemical substances, a type of SCCPs, and DnPP).  Three of the proposed SNURs would regulate the chemical substances and articles containing them.

Why is this big news?  Well, when EPA issues a SNUR, it is designating a use of a chemical not already in commerce as “new” and subjecting that use to premarket EPA review.  This means a manufacturer (including importers) wishing to make a product containing the SNUR substance must submit to EPA a significant new use notice (SNUN) at least 90 days before any commercial use.  The uncertain outcome of any SNUN review is the bane of a company’s quest for commercial predictability.  Reviews can take considerably longer than 90 days, and EPA’s TSCA authority can be expressed in the imposition of commercial restrictions or operating conditions, some of which may need to be communicated to downstream customers of the SNUN submitter.

There is also concern with the legal and policy implications of these proposals.  The proposed rules would regulate SNUR chemicals in articles independent of whether any such article actually poses a risk.  EPA notes its concern that if PBDEs contained in articles were exempt, there would be in increase in the amount of PBDEs in commerce in the United States without EPA review as to the implications.  This observation, while accurate, falls short of describing any nexus between the presence of PBDEs in articles and risk.

EPA also places an enormous (and some would argue disproportionate) legal burden on commenters to explain existing uses, and to define terms and use applications with sufficient granularity to avoid being considered “new.”  Given the complexity of imported articles, EPA’s “one size fits all” approach begs the question whether a more refined subset of articles, products that might actually pose risks, is a more fitting candidate for SNUR regulation.

Important threshold questions of whether EPA should even use its SNUR authority in this way, and the practical implications of doing so, are not framed in the proposals.  Whether TSCA’s SNUR authority is the best or only way to address chemical risks, and whether all articles as defined in the proposals present risks worth regulating deserves greater stakeholder discussion.  Comments on Federal Register notices that assume the legitimacy of EPA’s legal and policy approach are a poor surrogate for vigorous public debate.

Michigan Court Imposes New Duty to Disclose on Real Estate Agents

Posted on February 16, 2012 by Michael Hockley

In Alfiero v. Bertorelli, the Michigan Court of Appeals affirmed a jury verdict holding a real estate agent liable under a theory of silent fraud and negligent misrepresentation for the failure to disclose environmental contamination beneath an abandoned factory that was rehabilitated into condominiums.  This decision raises the duty of care for real estate agents in transactions involving property where there are known past environmental issues.

Plaintiffs sued both the seller and its agent after learning the condominium unit plaintiffs’ purchased had not been properly decontaminated, contrary to statements in a sales brochure and newspaper article the agent provided to plaintiffs in response to plaintiffs’ inquiry about the status of past environmental contamination at the property.  The real estate agent relied upon information provided by seller and argued that although a seller has a duty to disclose to a buyer, that duty does not extend to the seller’s agent, and the agent should not be liable for seller’s misrepresentations. 
 
The unit was located in a former factory that had been contaminated with trichloroethylene (“TCE”).  During the conversion of the factory into condominiums, a TCE vapor barrier was installed, but the site was never properly decontaminated.  Plaintiffs believed that the site had been properly cleaned up because of statements to that effect in the newspaper article and sales brochure provided to them by the real estate agent in response to buyers’ inquiries concerning past contamination.  Plaintiffs purchased the condominium in reliance on those representations without conducting independent due diligence. 

The appellate court ruled in favor of plaintiffs on the grounds of common law fraud or fraudulent misrepresentation, noting that the elements are (1) a false representation of a material fact with the intention of reliance by plaintiffs; (2) defendant knew the representation was false or was made with reckless disregard for its accuracy; and (3) plaintiff actually relied on the representation and suffered damages as a result. (M&D Inc. v. McConkey). The court further found silent fraud is essentially the same except it is based on the defendant withholding or suppressing a material fact that he or she was legally obligated to disclose rather than making an affirmative representation. 

Because both silent fraud and negligent misrepresentation require that a defendant owe a duty to the plaintiff, defendants argued that previous Michigan decisions did not impose on an agent a per se duty of disclosure to buyers and that such duty instead lies solely with the sellers.  The court held that although that is the general rule, when a buyer has expressed a concern about a particular statement, a duty to disclose may arise solely because of the buyer’s expressed interest or direct inquiry to the agent.  Defendants also argued there cannot be fraud if the party claiming to be defrauded had an independent means to determine the truth of the matter.  The court again acknowledged the general rule but held that it is not an absolute rule, stating it is “only applied where plaintiffs ‘were either presented with the information and chose to ignore it or had some indication that further inquiry was needed.’” 

The agents provided plaintiffs with a sales brochure stating that the site had been cleaned up.  When plaintiffs further inquired to the agents about the state of the cleanup, the agents referred plaintiff to a newspaper article reporting that the building had been decontaminated.  Based on those statements, the court found that plaintiffs had no duty of further inquiry and could reasonably rely upon information provided by the agent. 

Nevertheless, the court issued a comparative negligence instruction to the jury, and the jury determined that Plaintiffs’ decision not to obtain an environmental inspection knowing that there had been contamination in the past made Plaintiffs partially at fault. 

This decision reinforces the duties on both sides of a real estate transaction (1) to make adequate and accurate disclosures, on the part of the seller and its agents, and (2) to make reasonable environmental inquiries on the part of the buyer, notwithstanding seller’s statements.  Even though a real estate agent as a general proposition may not be responsible for the seller’s representations concerning a property’s environmental status, a duty is triggered when a buyer makes specific inquiry concerning a factual representation about the property and the agent provides additional information to buttress the seller’s representations. 

The lesson to be gleaned from this case is simple:  a seller’s agent should conduct his or her own due diligence concerning statements about the remediation of environmental contamination when the property has known or suspected past contamination.  Similarly, even for residential properties, buyers have an obligation either to conduct independent verification of seller’s statements concerning environmental conditions or to seek contractual representations and warranties from the seller concerning such conditions. 

California Revives Its “Green Chemistry” Initiative

Posted on January 10, 2012 by Robert Falk

SUMMARY
After a failed attempt at the end of the Schwarzenegger Administration, under current Governor Jerry Brown, California is now pushing forward with its new “green chemistry” approach to the regulation of chemicals in consumer products.  These regulations are likely to be formally unveiled early this year and will require extensive risk and life cycle analyses for prioritized products, which are likely to initially include children’s products, personal care products, and household cleaning products. 

The Envisioned Process
The revised California green chemistry regulations will establish a four-step process to identify safer consumer product alternatives.

1.  Chemicals:  The State will publish an initial list of Chemicals of Concern (COCs), likely involving close to 3,000 substances. 
2.  Priority Products:  Next, it will develop a list of Priority Products based on its evaluation of products that contain the identified COCs, as well as the distribution, use, and disposal patterns.
3.  Business Duty to Notify and Evaluate:  Responsible entities will be required to notify the State when their product is listed as a Priority Product and to perform an Alternatives Assessment. 
4.  Product/Chemical Limits/Regulations:  California will identify and impose a “Regulatory Response” to limit potential adverse public health and environmental impacts.

Applicability
As drafted, the regulations will eventually apply to all consumer products containing a COC that are sold, offered for sale, supplied, distributed, or manufactured in California.  There are limited exemptions for:

•    Products exempted by law (specified medical and dental devices, “dangerous” prescription drugs, food, and pesticides) and products used solely to manufacture a product exempted by law;
•    Products manufactured, stored in, or transported through, California, solely for out-of-state use; and
•    Products regulated by other federal or California state regulatory programs or international trade agreements, where the program or agreement provides an equivalent or greater level of protection of public health and the environment than would be provided if the product were listed as a Priority Product (no examples are specified, but EU programs seem likely candidates).

There are de minimis exemptions for products with COCs at concentrations equal to:

•    0.01% by weight for chemicals exhibiting one of nine specified hazard traits (carcinogenicity, developmental toxicity, reproductive toxicity, endocrine toxicity, genotoxicity, immunotoxicity, neurotoxicity, bioaccumulation, or environmental persistence);
•    0.1% by weight for chemicals that do not exhibit any of the nine specified hazard traits and environmental and toxicological endpoints; or
•    A lower or higher concentration if specified by DTSC in the Priority Products list.

The regulations apply to any “responsible entity,” which includes the manufacturer, or, if the manufacturer does not comply, the importer or retailer. 

Alternatives Assessment
This assessment remains at the heart of the Green Chemistry regulations.  Each must be conducted in two stages, with a report sent to State regulators at the end of each stage.

Necessity/Identification of Alternatives:  In the first stage, product criteria are identified (e.g., by function, performance, technical, and legal requirements).  A statement must be provided on whether the COC or a substitute chemical is necessary to meet the product’s requirements.  Next, alternatives to the usage of the COC must be identified and screened, and a work plan proposed for the second stage.   
Detailed Assessment of Alternatives:  The second stage requires a more detailed assessment of alternatives.  The product and each alternative must be evaluated with respect to relevant factors and associated exposure pathways and life cycle segments.  At this stage, the responsible entity selects an alternative that will replace or modify the Priority Product or decides not to modify the Priority Product (or discontinue the distribution of the product in California). 

Regulatory Responses
At a minimum, product information will be required to be provided to consumers if a Priority Product contains a COC above the de mimimis level. Additional possible regulatory responses include mandating implementation of engineered safety measures designed to control access or limit exposure to the COC in a Priority Product and, at the extreme, a potential prohibition on sale of the Priority Product within California. 

CONCLUSION
With reform of the Toxic Substances Control Act stalled in Congress, Governor Brown’s Administration appears more determined than its predecessor to take the lead in product stewardship and chemical regulation through California’s so-called “green chemistry” initiative.

 

Enforcing Workers’ Compensation in Toxic Tort Birth Defects Cases: Delaware Court Rejects First in Series of Preconception Tort Cases

Posted on January 9, 2012 by Patrick Dennis

By:    Patrick W. Dennis and Perlette Michèle Jura
         GIBSON DUNN

In the past few years, more than 25 multi-party cases have been filed against semiconductor manufacturers, alleging that employees working in “clean rooms” were exposed to chemicals, such as ethylene glycol ethers, which caused birth defects in the employees’ children.   The majority of these cases have been filed in Delaware state court and seek direct recovery in tort for children plaintiffs, who allege that they were exposed to these chemicals through their employee-parents prior to conception or in utero.   In addition to raising a number of environmental and causation issues, these cases present significant questions about the scope and extent of the duties employers in the non-medical industries have to unborn persons.  They also raise important questions about whether such claims should be addressed through civil litigation, or whether they fall within the exclusive domain of workers’ compensation. 

In a pivotal opinion, on September 30, 2011, Delaware Superior Court Judge Jan R. Jurden (who is presiding over more than a dozen clean room cases) dismissed a clean room case, Peters v. Texas Instruments.  Applying Texas law (where the alleged exposures occurred), Judge Jurden found that the exclusivity provision of the Texas Workers’ Compensation Act (which provides that workers’ compensation is the exclusive remedy for alleged workplace injuries) barred the child’s (and its parents’) civil claims against defendant Texas Instruments, because the child plaintiff’s claims were derivative of and dependent on the parent-employee’s.  Id.  The court also found that, to the extent that the plaintiffs sought to hold Texas Instruments liable for acts predating the child’s conception, Texas courts have not recognized preconception tort liability and it would be improper for Delaware courts to do so when applying Texas law, particularly because expansion of a legal duty falls within the realm reserved to the legislative, as opposed to judicial, branches. It is noted that the Plaintiffs are seeking reconsideration in Peters, but it will be a difficult decision to change from a legal perspective.

The Peters decision may be the first of many dismissals in the series of clean room birth defects cases.  Peters is also an important decision in the developing body of transgenerational tort law and birth defects cases generally.   While a handful of courts have recognized that medical professionals can be liable to individuals for their actions prior to that person’s birth, numerous courts have recognized that imposing duties to unborn children beyond a very narrow set of circumstances would not only prove unworkable, but would also constitute an improper judicial interference in a realm reserved for the legislative branch. An example is the Texas Appellate Court decision in Chenault v. Huie.   Further, employers spend millions on workers’ compensation every year.  One of the benefits that workers’ compensation schemes offer to employers is the promise of exclusive and limited liability: an employee’s recovery for work-related injuries is limited to the amount fixed by the governing workers’ compensation scheme and the employer will not be liable in tort, unless the injury was intentionally caused.  If parent-employees could bring lawsuits on behalf of their minor children for birth defects allegedly caused by preconception or in utero exposures in the course of their employment, it would create a significant loophole in workers’ compensation schemes and disrupt the delicate balance state legislatures have struck between employer and employee interests in the workers’ compensation arena. 

Oversight of Nanomaterials Lags

Posted on December 30, 2011 by Leslie Carothers

The cover of Time magazine’s recent issue on inventions depicts a motorized hummingbird, a mini-machine, enabled by nanotechnology, that can mimic the bird’s flight capability and conduct surveillance operations.  Other nanomaterial inventions --using particles at the scale of one billionth of a meter-- include an industrious particle that can hunt down and kill cold viruses.  Amen to that.  As the science of nanomaterials continues to amaze, how are we doing on the governance front to be ready to manage its potential risks to health and the environment? 

The departure of Steve Owens, EPA Assistant Administrator for Prevention, Pesticides, and Toxic Substances, concludes a notable effort to address governance issues in the nano realm; but at the end of 2011, major initiatives to obtain the information needed for a credible oversight program remain incomplete. Under the prior administration, EPA  requested voluntary submittal of data from nanomaterial producers.  About 30 organizations submitted data on 130 materials.  Not surprisingly, only a handful accepted the invitation to conduct voluntary testing for EPA.  The results satisfied no one.  Under Mr. Owens, EPA developed a package of proposed rules under the Toxic Substances Control Act (TSCA) including a Section 4 test rule, a significant new use rule under Section 5 addressing nanomaterials based on chemical substances listed in the TSCA inventory and a Section 8(a) information gathering rule.  These proposals have been under review at OMB’s Office of Regulatory Information and Review (OIRA) for over a year.   

Meanwhile, OIRA, along with the Office of Science and Technology and the Office of the Trade Representative, issued a 5 page memorandum in June, 2011, to provide policy guidance for the multiple federal agencies dealing with nanomaterials under legal oversight authorities.  The memorandum describes the many benefits of nanomaterials, while also acknowledging the need for further scientific work on health and environmental issues as a predicate for appropriate risk management actions.  The only sign that the writers recognize any legal issues complicating action under TSCA or other statutes is a statement  that some statutes may limit mandatory reporting or information gathering to circumstances “where a risk or harm has already been identified,” TSCA’s well known catch-22 in establishing test rules.    This observation is followed by a Delphic reference to agencies’ need “to explore other legally available means to obtain the information necessary to assess risk and possible harms.”  What this means for EPA’s pending proposals is anybody’s guess. 

Information reporting rules for nanomaterials are not easy to develop. EPA must define categories of materials to be reported on, the types of products and facilities to be covered, and the level of detail on product composition and potential impacts from emissions or disposal needed to understand exposures while minimizing the burden of reporting.  In other countries such as France and Canada, efforts  to set mandatory reporting rules have been bedeviled by definitional issues.  France has also faced the challenge of, harmonizing its rules with the European Union’s chemical regulation scheme.   Canada’s Health Agency recently issued a policy statement with a working definition for nanomaterial for use in data reporting at some future time under its existing legal authorities.
                                                 
EPA’s ability to obtain basic information on the production and use of important categories of nanomaterials remains a prerequisite for minimal oversight of the nanomaterials industry offering some assurance to the public that if health or environmental risks are identified by research, they can be addressed without undue delay.  The program begun by Mr. Owens ought to move forward for public review and comment. 

 

Leslie Carothers
Scholar-in-Residence and Adjunct Professor
Pace Law School

New TSCA Reporting Rule Compels Disclosure of Much Information

Posted on December 16, 2011 by Lynn L. Bergeson

The U.S. Environmental Protection Agency (EPA) published on August 16, 2011, the final Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR) Rule, previously referred to as the Inventory Update Reporting (IUR) Modifications Rule.  76 Fed. Reg. 50816.  The rule authorizes EPA to collect and disclose information on the manufacturing, processing, and use of commercial chemical substances and mixtures listed on the TSCA Inventory.  The CDR Rule also sets the upcoming submission period from February 1, 2012, to June 30, 2012, and will include submission of chemical production information from 2010 and chemical production, processing, and use information from 2011. 

The rule is significant for three reasons.

First, the rule’s impact is enormous.  Thousands of businesses are affected and include, among others, chemical substance manufacturers and importers, chemical substance users and processors that may manufacture a byproduct chemical substance, utilities, paper manufacturing, primary metal manufacturing, and semiconductor and other electronic component manufacturing.

Second, this is not your grandmother’s rule.  EPA is requiring electronic reporting of CDR information, making the compilation, analysis, and release of these data more efficient, more immediate, and definitely more difficult.  Chemical detractors, competitors, and the plaintiffs’ bar will have more rapid and easier access to comprehensive chemical production and use information.

Third, failed reporting consequences are harsh.  CDR/IUR reporting infractions have been a target rich enforcement area for EPA for years.  Omitted chemicals and/or facilities are subject to steep fines that rack up quickly.  Criminal sanctions apply to submitters making “knowing and willful” false confidentiality claims.

Smart businesses see this rule for what it is -- a TSCA compliance obligation and an invitation to competitive and reputational disaster if mishandled.  Read the rule, understand EPA’s objectives, and start now to prepare for the June 30, 2012, deadline.  More information is available here and here.