226 Search Results

January 13, 2021 |
Department of the Interior’s New Migratory Bird Treaty Act Interpretive Rule in the Crosshairs

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The Trump administration recently finalized a rule that clarifies that the incidental killing of migratory birds is not punishable under the Migratory Bird Treaty Act (the “MBTA”).

Part of a multinational effort to protect migratory birds, the MBTA was enacted in 1918 as a response to concern over poaching and over-hunting.

The Act criminalizes the hunting, taking, capturing or killing of birds – “by any means or in any manner” – and does not expressly exempt activities whose underlying purpose is one other than inflicting such harm. The possibility of MBTA liability has therefore long lurked in the shadows of petroleum refineries, wind projects, electric transmission lines, and other energy and infrastructure projects whose normal business operations may result in inadvertent impacts to birds. Indeed, the federal government has, albeit infrequently, wielded the MBTA to hold parties accountable for accidental bird kills in the past, including several prosecutions of oil and gas industry actors during the Obama Administration. More often, regulators use the threat of MBTA liability to encourage energy projects and other operators to voluntarily adopt bird impact mitigation best practices.

The U.S. Department of the Interior (“DOI”) claims that its new regulation reaffirms the original meaning and intent of the MBTA and that it is consistent with the interpretation of “several” federal courts (more on that in a moment).[1] While the rule intends to provide legal certainty to landowners and business interests, it is likely to meet immediate resistance on multiple fronts.

Environmentalists and their political allies have been quick to voice their opposition to a regulatory move that DOI has conceded will likely result “in increased bird mortality.”[2] A senior official in the Biden transition team has already indicated that the new administration will work to roll back the regulation,[3] with reversal options including new rulemaking(s) or Congress’s use of the Congressional Review Act (the “CRA”) to rescind the rule. The CRA allows Congress, with Presidential approval, to rescind a rulemaking by simple majority within 60 legislative days of the rule’s finalization. Democrats’ recent clinching of Senate control increases the odds that the CRA option will be exercised.

In the meantime, environmentalists are likely to take their case to court, undeterred by the likely obstacle of agency deference, which would preserve DOI’s interpretation of the MBTA so long as a court deems the interpretation reasonable. Such deference was not on the table when a federal judge recently rejected an earlier DOI legal opinion from December 2017 that informally adopted the MBTA interpretation now codified via formal rulemaking. The U.S. District Court for the Southern District of New York concluded that the MBTA is broad enough to criminalize incidental bird impacts, and rejected the December 2017 legal opinion under the Administrative Procedure Act as contrary to law. The court recognized that the Court of Appeals for the Fifth Circuit had previously limited the MBTA’s prohibition to deliberate acts done directly and intentionally to migratory birds, but sided with prior opinions from the Second and Tenth Circuits that held that incidental impacts are also criminal.[4]

A circuit split will once again be the status quo if DOI’s rule is administratively, legislatively, or judicially undone, unless and until the Biden Administration goes a step further and promulgates a formal rule interpreting the MBTA as prohibiting the incidental take of migratory birds.

Assuming the new DOI rule is ultimately overturned, exactly how the Biden Administration will approach MBTA enforcement is uncertain. Environmentalists will bring pressure to take an aggressive approach to wildlife protection, but it is reasonable to expect that the President-elect’s friendly outlook toward the renewable energy sector, which potentially faces the most significant impact from a stringent application of the law, will result in continued leniency for wind energy operators and supporting facilities that implement bird protection best practices. Whether the Biden Administration would be inclined to extend such goodwill more broadly is less clear.

___________________

  [1]   U.S. Fish and Wildlife Service Finalizes Regulation Clarifying the Migratory Bird Treaty Act Implementation, U.S. Fish & Wildlife Service (January 5, 2021), https://www.fws.gov/news/ShowNews.cfm?ref=us-fish-and-wildlife-service-finalizes-regulation--clarifying-the-&_ID=36829.

  [2]   Page 8 of Final Environmental Impact Statement, Regulations Governing Take of Migratory Birds, prepared by Fish & Wildlife Service, U.S. Department of Interior (November 2020).

  [3]   Lisa Friedman, Trump Administration, in Parting Gift to Industry, Reverse Bird Protections, New York Times (January 5, 2021), https://www.nytimes.com/2021/01/05/climate/trump-migratory-bird-protections.html.

  [4]   Nat. Res. Def. Council, Inc. v. U.S. Dep't of the Interior, No. 18-CV-4596 (VEC), 2020 WL 4605235, at 7 (S.D.N.Y. Aug. 11, 2020). The Court also posited that the Eighth and Ninth Circuits, in separate decisions regarding MBTA liability, have both left the door open to finding that the MTBA creates criminal liability for incidental bird kills.


Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Environmental Litigation and Mass Tort practice group, or the authors:

Michael K. Murphy – Washington, D.C. (+1 202-955-8238, mmurphy@gibsondunn.com) Kyle Neema Guest – Washington, D.C. (+1 202-887-3673, kguest@gibsondunn.com)

Please also feel free to contact the leaders of the Environmental Litigation and Mass Tort practice:

Stacie B. Fletcher – Washington, D.C. (+1 202-887-3627, sfletcher@gibsondunn.com) Daniel W. Nelson – Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com)

© 2021 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

December 1, 2020 |
California Air Resources Board Approves Significant Changes to Stationary Source Emissions Reporting Requirements, Increasing Number of Reportable Chemicals to 1,300

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The California Air Resources Board (CARB) recently approved significant changes to the requirements for reporting emissions from stationary sources to help monitor air pollution at local levels. Local air pollution control districts previously controlled reporting, but as of January 1, 2020, the Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants implements uniform statewide annual reporting of criteria air pollutant and toxic air contaminant emissions data. The amendments adopted last week aim to improve this program by creating a unified reporting mechanism and establishing expanded and consistent reporting criteria.[1] Thus, sources should stay up to date on changes to the regulation’s reporting triggers and formats.

Among other changes, the amendments do the following:

  • “Establish additional applicability specifications for sources emitting more than four tons per year of criteria pollutants (or 100 tons per year for carbon monoxide).”[2]
  • “Establish additional toxics-based applicability specifications based on identified activity levels for specified permitted emissions processes.”[3]
  • Establish a new applicability category encompassing “additional facilities located both statewide, as well as in the most highly impacted communities,” including, for example “retail gasoline fueling stations, dry cleaners, print shops, auto body and auto paint shops, metal plating, metal grinding and finishing facilities, coating and finishing facilities, industrial cleaning and degreasing operations, welding operations, facilities with backup diesel generators and emergency fire pumps, and others.”[4]
  • Create “abbreviated reporting options for specified industrial sectors to simplify reporting requirements.”[5]
  • Expand the regulation’s applicability from about 1,300 facilities to more than 60,000 facilities.[6]
  • Increase the number of reportable emission-producing chemicals from approximately 450 to more than 1,300 over a phase-in period based on chemicals’ known health effects, toxicity, and carcinogenic risks.[7]
  • Include provisions that allow the public to report information about potential emissions sources.[8]

A CARB Board Member explained that emission inventories are “a fundamental tool for understanding the sources that contribute to California’s air quality and climate challenges.”[9] The new amendments are designed to improve data collection and trend assessment to better prioritize reduction efforts in emissions hot spots.

The amendments’ cost impact on the private sector is “projected to be $9.6 million annually, maximum,” primarily for data reporting.[10] Local and state governments are expected to incur “a maximum of $5.6 million and $149,000 per year, respectively,” in implementation costs.[11]

The next step in the process is for the Office of Administrative Law to review the amendments, and when they become final, they may be challenged by industry members who are impacted.[12]

_____________________

   [1]   See Proposed Amendments to the Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants, art.2 (Requirements for Calculating and Reporting Criteria Pollutant and Toxic Air Contaminant Emissions), https://ww3.arb.ca.gov/regact/2020/ctr/pro.pdf.

   [2]   Public Hearing to Consider Amendments to the Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants Staff Report: Initial Statement of Reasons at 5 (Sept. 29, 2020), https://ww3.arb.ca.gov/regact/2020/ctr/isor.pdf.

   [3]   Id.

   [4]   Id. at 9-10.

   [5]   Id. at 5.

   [6]   Id. at 2.

   [7]   CARB Approves New Approach to Measuring Stationary Source Emissions to Aid Local Air Pollution Inventory Efforts (Nov. 24, 2020), https://ww2.arb.ca.gov/news/carb-approves-new-approach-measuring-stationary-source-emissions-aid-local-air-pollution.

   [8]   Id.

   [9]   Id.

[10]   Public Hearing to Consider Amendments to the Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants Staff Report: Initial Statement of Reasons at 2 (Sept. 29, 2020), https://ww3.arb.ca.gov/regact/2020/ctr/isor.pdf.

[11]   Id.

[12]   Amendments to the Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants, https://ww2.arb.ca.gov/rulemaking/2020/proposed-amendments-reporting-criteria-air-pollutants-and-toxic-air-contaminants (last visited Nov. 30, 2020) (tracking status of proposed amendments).


The following Gibson Dunn lawyers assisted in preparing this client update: Thomas Manakides, Abbey Hudson, Joseph Edmonds and Jessica Pearigen.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Environmental Litigation and Mass Tort practice group, or any of the following:

Stacie B. Fletcher - Co-Chair, Washington, D.C. (+1 202-887-3627, sfletcher@gibsondunn.com) Daniel W. Nelson - Co-Chair, Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com) Thomas Manakides - Orange County (+1 949-451-4060, tmanakides@gibsondunn.com) Abbey Hudson - Los Angeles (+1 213-229-7954, ahudson@gibsondunn.com) Joseph D. Edmonds - Orange County (+1 949-451-4053, jedmonds@gibsondunn.com) Jessica M. Pearigen - Orange County (+1 949-451-3819, jpearigen@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

November 18, 2020 |
California Air Resources Board Releases Draft Annual Evaluation of Fuel Cell Electric Vehicle & Hydrogen Fuel Station Network Deployment

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In 2013, California set hydrogen infrastructure targets to promote development and growth of the fuel cell electric vehicle (FCEV) and hydrogen fueling market.[1] Yesterday, the California Air Resources Board (CARB) released a draft annual report that analyzes the industry’s current status and near-term outlook, and recommends “actions necessary to maintain progress and enable continued future expansion.”[2]

Despite the COVID-19 pandemic, California’s hydrogen fueling network and the number of FCEVs on the road have continued to grow over the past year.[3] CARB concluded that the hydrogen fueling industry is “responding favorably” to California’s “maturing support systems.”[4] As of July 3, 2020, there were 42 open-retail stations, with five stations opened and nine newly funded this year.[5] The total network has reached 71 opened and planned projects across the State.[6] And the California Energy Commission is expected to announce the recipients of co-funding for new stations in the near future.[7]

Although growth projections have shifted back one year compared to prior estimate due to the pandemic, auto manufacturers nevertheless seem poised to accelerate production of FCEVs in tandem with projected fueling station development.[8] And deployment data suggests that FCEV technology has a shot at wide-spread consumer adoption based on similar trends for consumer acceptance of the current generation of battery electric vehicles.[9]

While California’s hydrogen fueling network has continued to advance and has become a priority among public and private stakeholders, CARB notes that progress must “not only continue[] but accelerate[]” in order to meet “State and industry targets for both zero-emission infrastructure development and [zero-emission vehicle] deployment.”[10] Although the State is on track to meet its AB 8 goals, “there is little room for station development delays.”[11] Specifically, the market needs “continued and coordinated industry and State support” to achieve economies of scale so that manufacturers will continue to produce FCEVs, and customer-facing costs will drop enough to make FCEV ownership possible for a broader swath of the California population.[12] CARB cites several “complementary factors” that are crucial to successful FCEV market growth: development of new supply chains and manufacturing capacity; increased consumer awareness and acceptance of FCEVs and hydrogen technology; expansion of the hydrogen fuel production network; and use of consumer incentives to make the technology more affordable.[13]

CARB recommends six specific priorities for industry development:

  1. Use AB 8 and HRI program funding, and any other means available, to develop as many light-duty hydrogen fueling stations as possible through the end of the AB 8 program.
  2. Appropriately balance the goals of developing stations in communities statewide and driving larger-capacity growth in highly developed local networks.
  3. Continue to assess ongoing and projected development pace and quickly address bottlenecks as the technology transitions to a broader market.
  4. Understand capacities and opportunities to reduce State funding and transition to a financially self-sufficient industry.
  5. Expand upstream hydrogen supply to ensure fuel availability for customers as the market expands.
  6. Encourage use of renewable hydrogen.[14]

CARB has solicited public and expert review of the draft report and will release a final revised report in 2021.

___________________

[1]   Assembly Bill No. 8 (Statutes of 2013).

[2]   California Air Resources Board, 2020 Annual Evaluation of Fuel Cell Electric Vehicle Deployment & Hydrogen Fuel Station Network Development xiv.

[3]   Id. at xiii, 3.

[4]   Id. at xiii.

[5]   Id. at xv-xvi.

[6]   Id.

[7]   Id. at xiii, 4-8.

[8]   Id. at xvii-xxii.

[9]   Id. at xx-xxi.

[10]   Id. at xiii, 62.

[11]   Id. at xxi.

[12]   Id. at 62.

[13]   Id. at xiii-xiv.

[14]   Id. at 62-63.


The following Gibson Dunn lawyers assisted in preparing this client update: Thomas Manakides, Abbey Hudson, Joseph Edmonds and Jessica Pearigen.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Environmental Litigation and Mass Tort practice group, or any of the following:

Stacie B. Fletcher - Co-Chair, Washington, D.C. (+1 202-887-3627, sfletcher@gibsondunn.com) Daniel W. Nelson - Co-Chair, Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com) Thomas Manakides - Orange County (+1 949-451-4060, tmanakides@gibsondunn.com) Abbey Hudson - Los Angeles (+1 213-229-7954, ahudson@gibsondunn.com) Joseph D. Edmonds - Orange County (+1 949-451-4053, jedmonds@gibsondunn.com) Jessica M. Pearigen - Orange County (+1 949-451-3819, jpearigen@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

October 14, 2020 |
California Air Resources Board Urges Self-Disclosure of Non-Compliant Software and Regulatory Violations by December 31, 2020

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On October 14, 2020, the California Air Resources Board (CARB) issued a letter to light-, medium-, and heavy-duty vehicle and engine manufacturers encouraging industry to report any hardware or software changes made to their vehicles or engines if such changes (i) affect emissions and (ii) were not previously or properly disclosed to CARB.  The letter indicates that the agency is in the process of selecting new targets for investigation and is implementing new enhanced testing to identify potential violations.  In connection with this forthcoming enforcement initiative, CARB urges industry to proactively and voluntarily disclose any violations under California mobile source regulations before the end of this year.  Companies that do so could secure a reduction in penalties ranging from 25% to 75%, depending on the relevant facts and circumstances of the case.

Background.  California law, like the federal Clean Air Act, requires manufacturers to disclose all auxiliary emission control devices (“AECDs”) at the time a particular vehicle or engine is submitted for certification.  California and federal law also prohibit the installation of any AECD that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use, unless certain exceptions apply.  Such functions are referred to as defeat devices. These requirements, or other reporting requirements, apply to a number of mobile source categories including light-duty vehicles, heavy-duty on-road engines and vehicles, highway motorcycles, off-road compression ignition engines, off-road small and large spark-ignition engines, off-highway recreational vehicles, spark-ignition marine engines, and evaporative systems for off-road small and large equipment and marine watercraft.

CARB’s October 14 letter builds upon, and incorporates by reference, a September 25, 2015 letter sent by CARB to light-, medium-, and heavy-duty vehicle and engine manufactures in the wake of the Volkswagen diesel emissions scandal related to its installation of defeat devices in its 2.0L and 3.0L diesel vehicles and reporting issues related thereto.  That letter reiterated manufacturers’ obligations to disclose all AECDs at the time of certification, and informed industry of CARB’s intent to begin implementing a robust testing program in support of CARB’s enforcement efforts designed to screen for undisclosed AECDs and defeat devices.

CARB's letter explains that through this expanded testing program, since 2015, it has achieved multiple settlements with vehicle and engine manufacturers.  It further notes that certain manufacturers have “stepped forward” to disclose potential violations, and it encourages others to make voluntary disclosures of any potential violations with respect to the applicable regulatory requirements.

Finally, the letter states that CARB currently is identifying new targets for investigation and plans to open a new, state-of-the-art testing laboratory in 2021, which will better enable it to identify violations related to vehicles and engines sold in California.

Potential Violations Highlighted in the Letter.  The letter lists the specific violation types CARB is presently investigating and for which it encourages manufacturers to make proactive reports:

  • Undisclosed AECDs
  • Defeat Devices
  • Unreported Running Changes and Field Fixes
  • Failure to Report or Address Warranty Claims
  • Manufacturer In-Use Compliance Testing and Manufacturer’s Self-Testing
  • Failure to Report Corrective Actions that Should be Under a CARB Approved Recall
  • Submission of False Data or Non-Compliance with Regulatory Test Requirements
  • Failure to Meet OBD Requirements
  • Failure to Disclose Adjustable Parameters that May Affect Emissions

CARB’s Request for Self-Disclosure.  The letter concludes by urging manufacturers to voluntarily disclose any potential violations in the above-listed categories by the end of 2020, and reiterates CARB’s authority to enforce California’s emissions laws against noncompliant manufacturers, including through the assessment of maximum penalties of $37,500 per mobile source or engine, per identified violation.  CARB states that voluntary disclosure “will trigger a reduction in penalties,” whereas failure to make a voluntary disclosure could result in future enforcement actions or influence ongoing investigations by CARB.

CARB’s letter states that this initiative reflects California’s ongoing efforts to meet existing and future air quality targets and to protect affected communities in the state from the effects of exposure to air pollution.


Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Environmental Litigation and Mass Tort practice group, or the following practice leaders and authors in Washington, D.C.:

Stacie B. Fletcher – Co-Chair (+1 202-887-3627, sfletcher@gibsondunn.com) Raymond B. Ludwiszewski (+1 202-955-8665, rludwiszewski@gibsondunn.com) Daniel W. Nelson – Co-Chair (+1 202-887-3687, dnelson@gibsondunn.com) Rachel Levick Corley (+1 202-887-3574, rcorley@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

August 20, 2020 |
13 Gibson Dunn Partners Named Lawyers of the Year

Best Lawyers® named 13 Gibson Dunn partners as the 2021 Lawyer of the Year in their respective practice areas and cities: Frederick Brown – San Francisco – Trademark Law Lawyer of the Year, Jessica Brown – Denver – Employment Law – Management Lawyer of the Year, Christopher Dillon – San Jose – Corporate Law Lawyer of the Year, Baruch Fellner – Washington, D.C. – Litigation – Labor and Employment Lawyer of the Year, Stewart McDowell – San Francisco – Banking and Finance Law Lawyer of the Year, Peter Modlin – San Francisco – Litigation – Environmental Lawyer of the Year, Kenneth Parker – Orange County – Litigation – Patent Lawyer of the Year, Doug Rayburn – Dallas – Securities/Capital Markets Law Lawyer of the Year, Douglas Smith – San Francisco – Corporate Governance Law Lawyer of the Year, Beau Stark – Denver – Mergers and Acquisitions Law Lawyer of the Year, Daniel Swanson – Los Angeles – Antitrust Law Lawyer of the Year, Jeffrey Thomas – Orange County – Litigation – Antitrust Lawyer of the Year and Robyn Zolman – Denver – Securities/Capital Markets Law Lawyer of the Year. The lawyers that were selected received particularly high ratings in Best Lawyers’ survey by earning a high level of respect among their peers for their abilities, professionalism and integrity. Only one lawyer in each legal community is selected as the Lawyer of the Year for each practice area.  The list was published in August 20, 2020.

August 3, 2020 |
NEPA Review Revamp: What Developers Should Expect from the CEQ’s New Rule and the Incoming Litigation Storm-Front

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After 40 years without an update, the White House Council on Environmental Quality (CEQ) has recently revamped its National Environmental Policy Act (NEPA) implementing regulations.

The revised NEPA regulations were published in the Federal Register on July 16, 2020. They include both substantive and procedural changes with the stated goal of streamlining and accelerating the environmental review process federal agencies are required to conduct under NEPA. The final rulemaking is the culmination of a Trump Administration directive to the CEQ to modernize the NEPA review process,[1] and follows a proposed rulemaking published in January of this year.

The most significant aspects of the CEQ’s final rule for project developers are that the CEQ: (1) clarified which undertakings should and should not be subject to NEPA environmental analysis; (2) created new time limits for environmental assessments (EAs) and environmental impact statements (EISs); (3) eliminated the requirement to consider whether a project is “highly controversial”; (4) revamped and streamlined the environmental “effects” analysis; and (5) revised the definition of a “reasonable alternative” to limit alternatives to those that are technically and economically feasible and consistent with the goals of the applicant.

The final rule has already been challenged and more challenges, both facial and as-applied, are expected. As such, project sponsors and private parties who are working with federal and state agencies who are relying on the new regulations must weigh the time saved under the new rule against the litigation risk that all or a portion of the regulations may not survive.

Below we discuss the most significant aspects of the new rulemaking and the threat of litigation on the horizon.

Clarifying the Scope of Projects Subject to NEPA

Several elements of the CEQ’s rulemaking function to reduce the number of projects subject to NEPA review. Most notably, the CEQ attacks the long-standing “small handle” problem head-on by carving “non-Federal projects with minimal Federal funding or minimal Federal involvement” out of the definition of “major actions” subject to NEPA.[2] This revision likely excludes a broad swath of state-led infrastructure projects from NEPA review, as well as privately funded transportation projects, but the CEQ left the task of defining “minimal Federal funding” or “minimal Federal involvement” to each of the reviewing agencies.[3]

The CEQ also encourages the identification, adoption, and use of categorical NEPA exclusions for agency activities deemed to consistently have an insignificant environmental impact, in part by providing reviewing agencies the flexibility to adopt another agency’s categorical exclusions.[4]

Time Limits for Environmental Reviews

Once it is determined that a project is subject to a NEPA review, the new regulations set presumptive time limits for the completion of a NEPA environmental review: one year (following the decision to prepare the review) for an environmental assessment (EA) and two years for an environmental impact statement (EIS).[5] This represents a significant time savings: According to the CEQ, the median time required for the preparation of an EIS is currently 3.5 years,[6] and so the new limits may provide relief to many developers.

However, these time limits are merely presumptive. Reviewing agencies may extend the deadlines should they deem it necessary, considering factors such as the number of the persons and agencies affected by the action under review;[7] more complex environmental reviews may therefore continue to run beyond the time limits. Still, some have expressed concern that, should agencies strictly adhere to the time goals and consequently rush through the drafting of an EA or EIS, such reviews may be more subject to legal challenge than they otherwise would be.

Eliminates Requirement to Consider Whether Project Effects Are “Highly Controversial”

The final rule removes the requirement that agencies consider “[t]he degree to which the effects on the quality of the human environment are likely to be highly controversial” when determining whether an environmental impact is “significant.”[8] The “highly controversial” prong has itself been highly controversial; as the CEQ explains, whether a project is “highly controversial” is “subjective and is not dispositive of effects’ significance.”[9]

Revamps the Environmental Effects Analysis

NEPA requires federal agencies to consider the “adverse environmental effects” of any “major federal action” which will significantly impact the human environment.[10] For decades, NEPA implementing regulations elaborated on this statutory mandate by directing reviewing agencies to categorize and analyze a proposed federal action’s adverse environmental effects as either “direct,” “indirect,” or “cumulative.”[11]

No longer. The new rulemaking simplifies the environmental effects analysis by instructing agencies to only assess environmental impacts which are “reasonably foreseeable” and have a “reasonably close causal relationship” to the action under review.[12] This revision will enable a reviewing agency to focus its time and resources on analyzing those environmental impacts which are most likely to be significant and eliminate highly unlikely or highly attenuated potential effects.[13]

Commenters critical of this change have attacked it as a means of excluding climate change concerns from the scope of NEPA review. To address such concerns, the CEQ explains that the new effects analysis framework does not explicitly bar reviewing agencies from considering a federal action’s climate change impacts,[14] and requires agencies conducting an EIS to consider “reasonably foreseeable” environmental trends when analyzing baseline conditions at the site of a proposed project.[15] The CEQ also pulled back from its proposal that effects should not be analyzed if remote in time, geographically remote, or the result of a lengthy causal chain, adding the word “generally” before those provisions.[16]

Despite this revision, this portion of the rule is expected to be challenged, as some courts have previously invalidated agency actions for failing to take a hard look at an action’s indirect impacts or cumulative impacts on climate change.[17]

Streamlines the Definition of “Reasonable Alternatives”

Under the prior rule, agencies were often required to consider alternatives to proposed actions that were not economically feasible, that the agencies had no ability to implement due to their jurisdiction, or that were unrelated to the goal of the applicant proposing the project.[18] The new definition of a “reasonable alternative” now bounds the analysis of alternatives by limiting the definition to alternatives that are technically and economically feasible and consistent with the goals of the applicant, where applicable.[19]

The NEPA Forecast: Cloudy, with a Certainty of Litigation

Litigation storm clouds are already brewing over the nascent NEPA overhaul.

The CEQ’s final rule is set to take effect on September 14, 2020.[20] Federal agencies may continue adhering to the preexisting NEPA review procedures with respect to any reviews commenced prior to September 14,[21] but will be required to implement the revised regulations for reviews commenced after the new rule’s effective date unless there is a clear and fundamental conflict with another applicable statute.[22] Agencies have a one-year grace period to actually revise their own implementing NEPA regulations to align with the CEQ’s update.[23]

The new regulations have already been challenged in court. On July 29, 2020, two lawsuits were filed in district courts challenging the rule under the Administrative Procedures Act—one in the Western District of Virginia, brought by the Southern Environmental Law Center on behalf of seventeen wildlife groups, and another in the Northern District of California, brought by the Western Environmental Law Center and Earthjustice on a behalf of a coalition of twenty environmental justice and outdoor recreation groups.[24] The two existing lawsuits emphasize the alleged environmental harms that will be caused by the changes to the CEQ’s NEPA regulations and protest the CEQ’s alleged dismissal of many of the rule commenters’ concerns. It is expected that these or other plaintiffs will seek preliminary injunctions to delay the effective date of the new CEQ rule, arguing that alleged defects in the rule stand to cause imminent and irreparable harm.

The existing facial suits face difficult standing and ripeness headwinds, in part because NEPA’s implementing regulations are directed at federal agencies and do not take effect until at least September 14. And the flexibility agencies have to apply the preexisting environmental review procedures to pending reviews will hamper any injunction requests lodged prior to the effective date. Moreover, NEPA’s broad, open-ended statutory language, as well as the deference afforded to agencies when issuing rules interpreting an ambiguous statute, will narrow challengers’ potential avenues of success on the merits.[25] Unchallenged provisions will likely be allowed to be implemented even while legal challenges to other provisions proceed, as the CEQ has specifically provided for its various revisions to be severable from one another.[26]

However, a storm-front of as-applied challenges is also on the horizon. Once the new rule becomes effective, and as agencies begin conducting their NEPA reviews in compliance with them, as-applied challenges to various revisions will proliferate.[27] Individual agencies’ various decisions regarding what actions entail “minimal federal involvement” or what indirect effects require analysis, for example, are likely to spawn litigation across the nation. Challenges to CEQ rules are not automatically brought to the Circuit of the U.S. Court of Appeals for the District of Columbia, meaning both facial and as-applied lawsuits will likely be filed in district courts across the country, potentially creating a patchwork of conflicting judicial guidance.

Of course, any legal wrangling will be for naught if Democrats sweep November’s election and invoke the Congressional Review Act (CRA) to rescind the CEQ’s rule. The CRA allows Congress, with Presidential approval, to rescind a rulemaking by simple majority within 60 legislative days of the rule’s finalization, and the Biden campaign has already indicated a desire to wield this weapon against vulnerable Trump Administration environmental rules.[28]

__________________________

   [1]   See Executive Order No. 13,807 (Aug. 15, 2017).

   [2]   40 C.F.R. § 1508.1(q)(vi).

   [3]   85 Fed. Reg. at 43347.

   [4]   40 C.F.R. § 1507.3(d)(2).

   [5]   85 Fed. Reg. 43304, 43326 (July 16, 2020); 40 C.F.R. § 1501.10.

   [6]   85 Fed. Reg. at 43305.

   [7]   40 C.F.R. § 1501.10.

   [8]   85 Fed. Reg. at 43322.

   [9]   Id.

[10]   42 U.S.C. § 4332.

[11]   85 Fed. Reg. at 43343.

[12]   Id.; 40 C.F.R. § 1508.1(g). Furthermore, the CEQ states that a “but for” causal relationship is insufficient to make an agency responsible for reviewing a particular effect under NEPA. 40 C.F.R. § 1508.1(g)(2).

[13]   85 Fed. Reg. at 43343, 43344.

[14]   85 Fed. Reg. at 43344.

[15]   40 C.F.R. § 1502.15.

[16]   85 Fed. Reg. at 43343, 43344.

[17]   See, e.g., WildEarth Guardians v. Zinke, 368 F. Supp. 3d 41 (D.D.C. 2019) (holding that the U.S. Bureau of Land Management was required to quantify downstream greenhouse gas emissions and reasonably foreseeable cumulative climate impacts of oil and gas development when authorizing leases on federal land); see also Juan Carlos Rodriquez, WH Tweak To Enviro Review Rule May Bring New Headaches, Law360 (July 26, 2020), https://www.law360.com/transportation/articles/1292130/wh-tweak-to-enviro-review-rule-may-bring-new-headaches.

[18]   See, e.g., Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 194 (D.C. Cir. 1991) (“[T]he rule of reason does not give agencies license to fulfill their own prophecies, whatever the parochial impulses that drive them. . . . [A]n agency may not define the objectives of its actions in terms so unreasonably narrow that only one alternative from among the environmentally benign ones in the agency’s power would accomplish the goals of the agency’s action.”).

[19]   85 Fed. Reg. at 43343, 43376.

[20]   40 C.F.R. § 1506.13.

[21]   Id.

[22]   40 C.F.R. § 1507.3.

[23]   Id.

[24]   Niina H. Farah, Enviros to court: Trump “cut every corner” on NEPA overhaul, E&E News (July 29, 2020), here.

[25]   See National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967 (2005) (giving deference an agency when issuing a rule that overturns a previous judicial precedent interpreting an ambiguous statute that the agency is tasked with executing).

[26]   40 C.F.R. § 1500.3.

[27]   Dawn Reeves, Critics Blast CEQ Rule Overhaul As Cutting ‘Heart’ Out Of NEPA’s Purpose, Inside EPA (July 16, 2020), https://insideepa.com/daily-news/critics-blast-ceq-rule-overhaul-cutting-‘heart’-out-nepa’s-purpose.

[28]   Coral Davenport, Democrats Eye Trump’s Game Plan to Reverse Late Rule Changes, N. Y. Times (July 17, 2020), https://www.nytimes.com/2020/07/17/climate/trump-regulations-election.html.


Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the developments discussed above.  To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, the following authors and members of the firm’s Environmental Litigation and Mass Tort or Energy, Regulation and Litigation practice groups:

Michael K. Murphy - Washington, D.C. (+1 202-955-8238, mmurphy@gibsondunn.com) Jason J. Fleischer - Washington, D.C. (+1 202-887-3737, jfleischer@gibsondunn.com) Kyle Neema Guest - Washington, D.C. (+1 202-887-3673, kguest@gibsondunn.com) Ruth M. Porter - Washington, D.C. (+1 202-887-3666, rporter@gibsondunn.com)

Please also feel free to contact the following practice leaders and members:

Administrative Law and Regulatory Group: Helgi C. Walker - Washington, D.C. (+1 202-887-3599, hwalker@gibsondunn.com) Lucas C. Townsend - Washington, D.C. (+1 202-887-3731, ltownsend@gibsondunn.com)

Energy, Regulation and Litigation Group: William S. Scherman - Washington, D.C. (+1 202-887-3510, wscherman@gibsondunn.com)

Environmental and Mass Tort Group: Stacie B. Fletcher - Washington, D.C. (+1 202-887-3627, sfletcher@gibsondunn.com) Daniel W. Nelson - Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 4, 2020 |
COVID-19 and Personal Injury Tort Liability: Preliminary Considerations for Businesses

Click for PDF As governments contemplate lifting COVID-19 restrictions, businesses looking to reopen their doors face numerous questions about the legal risks of operating in the midst of a pandemic.  Some of the most pressing concerns include identifying the precautions needed to avoid transmission of the virus to employees, customers, or others in proximity to their operations and the potential for liability if individuals become severely ill or die from a COVID-19 infection.  Personal injury claims based on COVID-19 are already being filed against businesses in courts across the country,[1] and some fear that a wave of litigation in the wake of the pandemic will threaten economic recovery.[2]  Plaintiffs have claimed that defendants failed to properly warn others of the presence of a COVID-19 outbreak,[3] and failed to take reasonable steps to prevent the virus from spreading.[4]  Some plaintiffs have even claimed that businesses that do not take sufficient precautions create a public nuisance,[5] which strategy echoes efforts by the plaintiffs’ bar to assert public nuisance claims in other contexts, such as opioid, tobacco, and environmental litigation.  Indeed, the potential for a high volume of lawsuits has prompted nursing homes to seek executive orders granting immunity from negligence claims involving COVID-19.[6]  And others have called for legislation to provide liability protections across many industries.[7], [8] Here, we preview just a few of the issues likely to shape the scope of liability in personal injury actions related to COVID-19. Standard of Care A plaintiff asserting a personal injury tort claim generally must prove that the defendant breached a duty of care owed to the plaintiff.  Businesses owe their employees, customers, and others with whom they interact a duty to exercise the level of care that would be exercised by a reasonably prudent person under the same or similar circumstances to avoid or minimize the risk of foreseeable harm.  This duty may include warning of dangerous conditions and taking reasonable steps to minimize the risks presented by known hazards. Courts recognize a general obligation of “one who has a contagious disease” to “take the necessary steps to prevent the spread of the disease.”[9]  The “necessary steps” depend on the circumstances.  As one court explained, “[t]he degree of diligence required to prevent exposing another to a contagious or infectious disease depends upon the character of the disease and the danger of communicating it to others.”[10]  In that case, the court reversed dismissal of a complaint alleging that the defendant, who owned a two-family residence and occupied one of the units, was negligent in failing to warn the other family that she had tuberculosis and in failing to avoid close personal contact.  A similar duty may extend to others who have some relationship with the sick person and knowledge of their condition, and are thus in the best position to prevent the spread of the disease.  For example, a physician whose patient receives an HIV-contaminated blood transfusion has been found to owe a duty of care to the patient’s future, unidentified sexual partners to inform the patient of the potential for HIV transmission.[11] In the context of COVID-19, the applicable standard of care is an open issue, and various plausible scenarios present particular challenges.  For example, while it seems uncontroversial to ask symptomatic employees to stay home, to what extent should that employee’s potential contacts within the workplace be similarly restricted even if they have not manifested any symptoms?  How long should sick employees remain away after recovering, especially when COVID-19 infection, which resembles other common illnesses, has not been confirmed by a positive test result?  And given the current limitations on access to reliable testing, are businesses obligated to take affirmative steps to detect sick employees and customers?[12]  How much certainty is needed before a duty arises to warn other employees and customers about the potential infection?  The level of precautions a business can reasonably take has implications not only for personal injury liability, but also, as noted above, for nuisance claims arguing that insufficient protective measures in the workplace threaten the entire community. Guidance from public health agencies, such as that recently issued for employers by CDC[13], [14] and OSHA,[15] will have an important role in shaping the standard of care.[16]  Businesses should monitor current guidance from state and federal agencies and act with that guidance in mind.  Acting consistently with guidance from public health authorities or other governmental authorities is likely to benefit a defendant faced with personal injury tort claims.  Conversely, a defendant that has not followed public health authority guidance is likely to see that same guidance asserted by future tort plaintiffs as the basis for a standard of care that plaintiffs will argue was breached.[17]  However, since current guidance is subject to change, is typically presented at a high level of generality, and often leaves details to the discretion of the employer based on circumstances, businesses should not assume compliance with agency guidelines necessarily provides a safe harbor against tort liability just as compliance with statutory and regulatory obligations generally does not bar tort claims. Additional sources of information on the standard of care include trade association guidance and common practice in the industry.  After all, “[c]ourts will not lightly presume an entire industry negligent.”[18]  Thus, it is advisable to be aware of the measures similarly situated businesses have adopted to mitigate the spread and risks associated with COVID-19 in considering the reasonableness of measures for your business. The contours of the standard of care will also continue to solidify as scientific understanding of the virus—and the nature of the risks it presents—grows.  Relevant factors include the means and likelihood of transmission at various stages of infection and the risk of serious illness or death upon infection.  These characteristics of COVID-19, which inform whether it is reasonable to take very stringent precautions, remain poorly understood, though research is advancing rapidly. Causation A personal injury tort plaintiff must also prove that the defendant’s breach of the duty of care proximately caused the claimed injury.  Here, plaintiffs are likely to face challenges.  COVID-19 is already widespread and highly contagious, and symptoms may not develop for several days after infection; indeed, some may be infected and infectious without any symptoms at all.  As a result, many people who become sick could have difficulty establishing by a preponderance of the evidence where and when they contracted the virus. This was true in the case of a nurse whose estate claimed she had been negligently exposed to H1N1 when she was asked to care for suspected H1N1 patients without an N95 mask, contrary to CDC guidance.  The court found that given the absence of evidence that the nurse actually treated an H1N1 positive patient and the fact that the virus was present in the community at large, the plaintiff’s claim of causation did not rise above the level of speculation.[19]  In a case involving Valley Fever, which is caused by a soil fungus common in the San Joaquin Valley of Central California, causation could not be proved beyond a mere possibility, as opposed to a reasonable medical probability, “[g]iven that over one-third of the population in the San Joaquin Valley tests positive for exposure to the fungus, and due to the great number of reasons for soil disturbance.”[20] COVID-19 presents similar causation issues, although cases arising in nursing homes, prisons, and other locations in which residents, or plaintiffs, had little contact with the outside world during the likely period of infection present a possible exception.  These dynamics also could change once the initial wave of COVID-19 cases subsides and it becomes more feasible to trace the origins of individual outbreaks. Workers’ Compensation Exclusivity Many injuries sustained in the workplace are redressed exclusively through the states’ workers’ compensation systems,[21] which generally provide for more streamlined resolution of claims and cap recoveries for certain injuries.  Not all workplace injuries are subject to workers’ compensation exclusivity, however, and the scope of exceptions varies from state to state.  In California, for example, exclusivity does not apply where the employee’s injury is aggravated by the employer’s “fraudulent concealment” of the existence of the injury and its connection with the employment.[22] For infectious diseases, workers’ compensation is generally available only where the job subjects the employee to a heightened risk of contracting the disease as compared to the general public.[23]  A healthcare worker who contracts COVID-19 after treating infected patients presents a straightforward example of an occupational disease, but application of the rule is less clear for workers whose jobs merely require regular interaction with the general public, since the general public itself is the source of the worker’s risk.  Concerns about the volume of workers’ compensation claims and the difficulty of demonstrating a causal connection to the workplace have motivated some states to adopt presumptive eligibility measures for certain classes of employees, including law enforcement, healthcare, and other essential workers.[24]

* * *

In sum, COVID-19 personal injury lawsuits have already made an appearance, and the volume of this litigation is likely to grow as businesses reopen and Americans increasingly encounter the virus in their workplaces, crowded venues, and interactions in business centers.  Businesses and employers face uncertainty regarding the undeveloped standard of care for COVID-19 personal injury claims, but should frequently have reasonable causation defenses under traditional principles of tort law.  Further, the extent to which the workers’ compensation system will absorb employees’ claims against their employers may depend on the risks of infection specific to the employee’s job and exceptions to workers’ compensation exclusivity that vary from state to state.  For a more comprehensive review of workers’ compensation issues raised by the COVID-19 pandemic, please refer to the Gibson Dunn Labor and Employment practice group client alert entitled, “Employer Liability and Defenses From Suit for COVID-19-Related Exposures in the Workplace.” ____________________ [1] Daniel Wiessner, Estate of Walmart worker who died from COVID-19 sues for wrongful death, Reuters, Apr. 7, 2020. [2] Editorial Board, Stopping a Lawsuit Epidemic, Wall St. J., Apr. 23, 2020. [3] Tim Reid, Seattle-area nursing home hit with wrongful death lawsuit over coronavirus death, Reuters, Apr. 10, 2020. [4] See Wiessner, supra note 1. [5] Noam Scheiber and Michael Corkery, Smithfield Meat Plant Conditions Assailed as Public Nuisance,  N.Y. Times, Apr. 24, 2020. [6] Marau Dolan, Harriet Ryan, and Anita Chabria, Nursing homes want to be held harmless for death toll.  Here’s why Newsom may help them, L.A. Times, Apr. 23, 2020. [7] Evan Greenberg, What Won’t Cure Corona: Lawsuits, Wall St. J., Apr. 21, 2020. [8] Natalie Andrews, Mitch McConnell Wants to Shield Companies From Liability in Coronavirus-Related Suits, Wall St. J., Apr. 28, 2020. [9] Mussivand v. David, 544 N.E.2d 265, 269 (Ohio 1989) (collecting cases). [10] Earle v. Kuklo, 98 A.2d 107, 109 (N.J. Super. Ct. App. Div. 1953) (quoting 25 Am. Jur., Health, § 45). [11] Reisner v. Regents of University of Cal., 31 Cal. App. 4th 1195, 1198-99 (1995). [12] Compare, Bogard’s Administrator v. Illinois Cent. R. Co., 139 S.W. 855, 857 (Ky. 1911) (rejecting argument that railroad had an affirmative duty to maintain the capability to diagnose measles in a passenger who allegedly spread the disease to plaintiff’s child), with In re September 11 Litigation, 280 F. Supp. 2d 279, 293-94 (S.D.N.Y. 2003) (recognizing a duty of airlines to screen passengers for contraband that could be used to hijack the airplane). [13] Centers for Disease Control and Prevention, Interim Guidance for Business and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19). [14] Centers for Disease Control and Prevention, Implementing Safety Practices for Critical Infrastructure Workers Who May Have Had Exposure to a Person with Suspected or Confirmed COVID-19. [15] Occupational Safety and Health Administration, Guidance on Preparing Workplaces for COVID-19. [16] See, e.g., In re City of New York, 522 F.3d 279, 285-86 (2d Cir. 2008) (“Governmental safety regulations can . . . shed light on the appropriate standard of care.”); Rolick v. Collins Pine Co., 975 F.2d 1009, 1014 (3d Cir. 1992) (holding OSHA regulations were relevant to the standard of care). [17] See, e.g., Ebaseh-Onofa v. McAllen Hospitals, L.P., No. 13-14-00319-CV, 2015 WL 2452701, at *6 (Tex. Ct. App., May 21, 2015) (noting plaintiff’s argument in lawsuit based on nurse’s death from H1N1 that the standard of care was determined by CDC’s purported requirement that healthcare workers use N95 masks when treating patients suspected of having the virus). [18] See In re City of New York, 522 F.3d at 285. [19] See Ebaseh-Onofa, 2015 WL 2452701, at *7. [20] See, e.g., Miranda v. Bomel Construction Co., Inc., 187 Cal. App. 4th 1326, 1336 (Cal. Ct. App. 2010). [21] See, e.g., Cal. Labor Code § 3602(a); 19 Del. Code § 2304. [22] Cal. Labor Code § 3602(b)(2). [23] See, e.g., Bethlehem Steel Co. v. Industrial Accident Commission, 21 Cal.2d 742, 744 (Cal. 1943). [24] Russell Gold and Leslie Scism, States Aim to Expand Workers’ Compensation for COVID-19, Wall St. J., Apr. 28, 2020.
Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments.  For additional information, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Coronavirus (COVID-19) Response Team or its Environmental Litigation and Mass Tort practice group, or the following authors: Daniel W. Nelson - Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com) Patrick W. Dennis - Los Angeles (+1 213-229-7568, pdennis@gibsondunn.com) Alexander P. Swanson - Los Angeles (+1 213-229-7907, aswanson@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 23, 2020 |
Supreme Court Holds That Clean Water Act May Require Permits For Some Indirect Discharges Of Pollutants Via Nonpoint Sources

Click for PDF Decided April 23, 2020 County of Maui v. Hawaii Wildlife Fund, No. 18-260

Today, the Supreme Court held 6-3 that the Clean Water Act requires a permit for the indirect discharge of pollutants from point sources to navigable waters via nonpoint sources, such as groundwater, if the discharge is the functional equivalent of a direct discharge. 

Background: The County of Maui disposes of treated wastewater by injecting it into groundwater through wells.  Some of the wastewater eventually reaches the Pacific Ocean.  Several environmental groups sued the County under the Clean Water Act, which prohibits the “discharge of any pollutant” into navigable waters without a permit.  33 U.S.C. §§ 1311(a), 1342.  This permitting requirement applies only to pollutants discharged into navigable waters from a “point source”—that is, “any discernible, confined and discrete conveyance” such as a “pipe” or “container.”  Id. § 1362(12), (14).  The requirement does not apply to the discharge of pollutants from nonpoint sources such as groundwater.  Although the County’s wastewater entered the Pacific Ocean from a nonpoint source (groundwater), the district court held that the County was required to obtain a permit because the wastewater originated in a point source (the well).  The Ninth Circuit affirmed, holding that the indirect discharge of pollutants through a nonpoint source into navigable waters requires a permit if the pollutants are “fairly traceable” from the point source to navigable waters.  After the Ninth Circuit’s decision, the EPA issued a new interpretive statement announcing its position that the Act does not require permits for any discharge via groundwater, although it might require permits for other indirect discharges.  The United States defended that position and supported the County as an amicus curiae.

Issue: Does the Clean Water Act require a permit for the discharge of pollutants that originate from a point source but are conveyed to navigable waters by a nonpoint source?

Court’s Holding: Sometimes.  If the discharge is functionally equivalent to a direct discharge from a point source into navigable waters, then the Clean Water Act requires a permit.

“Whether pollutants that arrive at navigable waters after traveling through groundwater are ‘from’ a point source depends upon how similar to (or different from) the particular discharge is to a direct discharge.

Justice Breyer, writing for the Court

Gibson Dunn submitted an amicus brief on behalf of Energy Transfer Partners, L.P. in support of petitioner County of Maui What It Means:
  • The Court purported to find its own “middle ground” between the positions of the parties. The Court rejected the Ninth Circuit’s “fairly traceable” test, the environmental groups’ test requiring a permit if a discharge from a point source “proximately caused” pollutants to enter navigable waters, the EPA’s groundwater-specific position, and the County’s bright-line rule that indirect discharges via nonpoint sources never require a permit.
  • The Court did not apply its standard to the facts of the case, and it expressly left open the question of when an indirect discharge is “functionally equivalent” to a direct discharge. The Court explained that the lower courts can resolve this question in “individual cases” using “the traditional common-law method.”
  • The Court directed judges to consider the Act’s “underlying statutory objectives,” and identified seven factors that may be relevant: (1) how long it takes the pollutants to reach navigable waters, (2) how far they travel, (3) what materials they flow through, (4) the extent to which they are diluted or chemically changed in transit, (5) the portion of the discharge that reaches navigable waters, (6) the manner by or area in which the pollutant enters the navigable waters, and (7) whether the pollutants maintain their specific identity.  The Court stated that the first two factors, time and distance, will be “the most important” in most but not all cases.
  • The Court emphasized that “Congress thought that the problem of groundwater pollution, as distinct from navigable water pollution, would primarily be addressed by the States or perhaps by other federal statutes.” Statements like this may support a narrow interpretation of the Court’s new standard in cases involving groundwater.

The Court's opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders:

Appellate and Constitutional Law Practice

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Miguel A. Estrada +1 202.955.8257 mestrada@gibsondunn.com

Related Practice: Environmental Litigation and Mass Tort

Daniel W. Nelson +1 202.887.3687 dnelson@gibsondunn.com Stacie B. Fletcher +1 202.887.3627 sfletcher@gibsondunn.com
© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 20, 2020 |
Supreme Court Holds That Superfund Site Landowners Need EPA Approval To Obtain State-Law Cleanup Remedies

Click for PDF Decided April 20, 2020 Atlantic Richfield Co. v. Christian, et al. No. 17-1498

Today, the Supreme Court held 7-2 that landowners at Superfund toxic waste sites must obtain EPA approval before seeking damages under state law for cleanup beyond what EPA has ordered. 

Background: In the 1970s, Atlantic Richfield purchased a now-defunct copper-smelting operation in Montana and has since spent more than $450 million cleaning up the site under a cleanup plan created by the Environmental Protection Agency (“EPA”) pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).

In 2008, nearby private landowners filed state-law claims against Atlantic Richfield in Montana state court, seeking around $50 million in “restoration damages” to pay for cleanup above and beyond what EPA had ordered. Atlantic Richfield argued that CERCLA bars the restoration-damages claims for three reasons: (1) the landowners’ claims are, in effect, a challenge to EPA’s plan and CERCLA Section 113 strips state courts of jurisdiction over such claims; (2) the landowners are “potentially responsible parties” under CERCLA § 122 who must get EPA approval for any remedial action; and (3) CERCLA preempts such state-law claims. The Montana Supreme Court rejected each of Atlantic Richfield’s arguments.

Issues: (1) Is a state-law claim for restoration damages in state court—seeking cleanup remedies that conflict with EPA-ordered remedies—a “challenge” to EPA’s cleanup plan that is jurisdictionally barred by CERCLA Section 113? (2) Is a landowner at a Superfund site a “potentially responsible party” that must seek EPA’s approval under CERCLA Section 122 before engaging in remedial action?? 

Court’s Holding: (1) No. CERCLA Section 113 strips state courts of jurisdiction only over claims brought under CERCLA, not those brought under state law.

(2) Yes. The landowners are potentially responsible parties because hazardous substances have “come to be located” on their properties. Thus, under CERCLA Section 122, the landowners cannot take “remedial action” on their lands without EPA approval.

“Interpreting ‘potentially responsible parties’ to include owners of polluted property . . . ensure[s] the careful development of a single EPA-led cleanup effort rather than tens of thousands of competing individual ones.

Chief Justice Roberts, writing for the Court

What It Means:
  • The Court’s decision provides certainty to companies with potential Superfund-cleanup exposure by making clear that EPA has exclusive authority to control both the cleanup efforts and the scope of responsible parties’ potential Superfund liability. The decision prevents landowners from imposing additional cleanup obligations or liabilities absent explicit EPA approval.
  • The Court’s interpretation of “potentially responsible party” means that Superfund-site landowners will need to obtain EPA authorization before significantly altering their land. But they need not obtain EPA approval to undertake minor modifications, such as “planting a garden, installing a lawn sprinkler, or digging a sandbox.”
  • The Court’s decision does not block landowners from bringing state-law claims seeking money damages for contamination on their land, so long as those damages are not earmarked for cleanup efforts at a Superfund site.
  • The Court declined to address whether CERCLA preempts state-law cleanup remedies that go above and beyond EPA’s cleanup plan.

The Court's opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders:

Appellate and Constitutional Law Practice

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com

Related Practice: Environmental Litigation and Mass Tort

Daniel W. Nelson +1 202.887.3687 dnelson@gibsondunn.com Stacie B. Fletcher +1 202.887.3627 sfletcher@gibsondunn.com

April 10, 2020 |
Calif. Organic Waste Regs Mean Sweeping Changes For Cos.

Los Angeles partner Abbey Hudson, Los Angeles associate Dione Garlick and Orange County associate Mark Tomaier are the authors of "Calif. Organic Waste Regs Mean Sweeping Changes For Cos." [PDF] published by Law360 on April 9, 2020.

April 6, 2020 |
The PREP Act Provides Limited Liability Protection for Certain Coronavirus Countermeasures

Click for PDF On March 17, 2020, Alex Azar, Secretary of the Department of Health and Human Services (HHS), issued a Declaration activating the Public Readiness and Emergency Preparedness Act (“PREP Act”), 42 U.S.C. § 247d-6d.  The Declaration extends immunity “from suit and liability under federal and state law with respect to all claims for loss caused by, arising out of, relating to, or resulting from” administration or use of qualifying products used to combat or reduce the spread of COVID-19 (the “PREP Declaration”).[1]  Along with other recent FDA guidance relaxing regulatory oversight for certain COVID-19-fighting products, the PREP Declaration protects manufacturers, suppliers, distributors, and others helping to mitigate supply shortages during the current crisis.  These protections are limited, however, and businesses should consider these limitations when evaluating whether the PREP Declaration protects their activities.  The applicability of the PREP Declaration to activities involving products created for use by the general public to minimize the spread of coronavirus, such as face masks and hand sanitizer, creates particularly challenging questions. Who is covered by the PREP Declaration? The PREP Declaration, issued under the PREP Act, grants immunity to manufacturers, suppliers, and distributors of, and healthcare providers authorized to use, qualifying products that treat COVID-19 or help prevent the spread of coronavirus.  The PREP Act defines “manufacturers” and “distributors” broadly to include suppliers and licensers, private label or own-label distributors, brokers, warehouses, wholesale drug traders, retail pharmacies, and carriers, among others.[2]  The PREP Declaration also extends immunity to “qualified persons,” such as licensed health care professionals or other individuals authorized to prescribe, administer, or dispense qualifying products.[3] What activities and products come within PREP Act immunity? The PREP Declaration makes immunity retroactive to February 4, 2020 and currently extends it to October 1, 2024.[4]  The PREP Act only creates immunity for activities involving a limited universe of authorized products.  Although the PREP Declaration extends immunity to activities directed to drugs, biologics, diagnostics, devices, and vaccines used to treat, diagnose, cure, prevent, or mitigate COVID-19, the product in question must meet two criteria in order for its manufacture, development, testing, distribution, use, or administration to be covered by the statutory immunity: 1) The product must be FDA approved, licensed for use under the Public Health Service Act, or cleared for use under a FDA emergency use authorization (“EUA”);[5] and 2) The party seeking immunity must be manufacturing, testing, developing, distributing, administering, or using the product pursuant to a federal contract or a federal, state, local or tribal virus response.[6] These limitations require especially careful consideration by those involved in the production, distribution, or administration of protective products used by the general public, such as face masks and hand sanitizer.  Examination of these two groups of products illustrates some of the issues to be considered. Example 1:  Face Masks for Use by the General Public.  Some face masks, including hospital grade surgical masks and certain N95 respirators, were FDA-approved before the PREP Declaration was issued.[7]  Other masks and respirators not intended for medical use, including respirators approved by the National Institute of Occupational Safety and Health (NIOSH) for use in manufacturing and similar workplaces, and certain imported respirators meeting NIOSH-like criteria in their home countries, were not previously FDA-approved.[8]  In further response “to this evolving public health emergency and continued filtering facepiece respirator . . . shortages,” FDA issued emergency use authorizations (EUA’s) in March and April 2020 allowing the medical use of both NIOSH-approved respirators and respirators approved under certain foreign standards, [9] and HHS brought them within the PREP Act’s definition of “Covered Countermeasures” by statute under the Families First Coronavirus Act.[10]  On April 3, FDA issued an EUA allowing medical use of imported disposable masks made in China, provided that the masks are approved by a Chinese regulatory authority and meet FDA-approved testing standards.[11]  In addition, FDA has authorized healthcare providers to reuse compatible, previously used N95 masks after decontaminating them pursuant to an approved system developed by the Battelle Memorial Institute.[12] Activities directed to masks that are not approved by FDA or NIOSH (or otherwise authorized by FDA based on compliance with foreign agency standards), and that are not created pursuant to a federal contract or governmental response, such as fabric masks created for general use, are not likely to be afforded PREP Act immunity—potentially raising liability concerns for companies involved in the production, distribution, or administration of non-surgical cloth face masks, which the CDC has now recommended be worn by individuals when they go out in public.[13] Another consideration that applies to face masks, in addition to whether the PREP Declaration provides immunity, is whether the manufacture and distribution of such masks could run afoul of FDA’s regulatory scheme for such products, potentially triggering an enforcement action.  On March 25, 2020, FDA issued guidance that it did not intend to initiate any enforcement action over non-surgical face masks that satisfy certain criteria, including that such masks: 1) have proper labeling that identifies the product as a face mask and includes a list of component materials, 2) have labeling that cautions against improper use, such as in surgical settings or other high-risk medical settings, or use in the presence of high heat or flammable gas; and 3) avoid labeling that misleadingly suggests that the mask will protect against viruses or allow for particulate filtration.[14]  FDA’s guidance also indicates that the agency will not enforce regulations governing surgical masks and face shields as long as they meet similar labeling and flammability criteria.[15]  Therefore, even if the manufacture or distribution of a nonmedical mask is not covered by PREP Act immunity, it is unlikely to be the target of a FDA enforcement action. Example 2:  Hand Sanitizers.  Another product widely used by the public to block the spread of coronavirus, and also facing a critical supply shortage, is alcohol-based hand sanitizer.  As with other products used to fight COVID-19, any FDA-approved medical hand sanitizer or consumer hand sanitizer developed, supplied, or administered under a federal program or official virus response is likely to be covered by PREP Act immunity. In contrast to respirators, however, FDA has not (as of this date) issued emergency use authorizations that would apply to hand sanitizers that were not previously FDA-approved.[16]  While unapproved hand sanitizers may not be subject to immunity under the PREP Declaration, FDA has encouraged increased production of hand sanitizer by compounding pharmacies and manufacturers, and has indicated that it will not enforce regulations against those entities provided certain qualifying conditions are present.  Specifically, the hand sanitizer must comprise only a list of approved ingredients, including 94% ethanol or isopropyl alcohol; be “de-natured” so that it is unsuitable for drinking; and be compounded according to a World Health Organization (WHO) formula.[17] As these two examples illustrate, the availability of PREP Act protection for any manufacturer, supplier, distributor, or user of products designed to combat COVID-19 requires close analysis of the product; the relationship of the product and/or manufacturer to a federally contracted or governmental health program; and compliance with health and safety regulations that govern the product.  Notably, even in certain instances where there is no PREP Act protection, FDA has nevertheless indicated that it will not institute enforcement actions. _____________________ [1] 85 Fed. Reg. 15198 (March 17, 2020). [2] 85 Fed. Reg. 15198 § V (“Covered Persons”); 42 U.S.C. §247d-6d(i)(2). [3] 85 Fed. Reg. 15198 § V (“Covered Persons”); 42 U.S.C. §247d-6d(i)(8). [4] 85 Fed. Reg. 15198  § XII (“Effective Time Period”). [5] 85 Fed. Reg. 15198 § VI (“Covered Countermeasures”) (“To be a Covered Countermeasure, qualified pandemic or epidemic products or security countermeasures also must be approved or cleared under the FD&C Act; licensed under the PHS Act, or authorized for emergency use under Sections 564, 564A, or 564B of the FD&C Act.”). [6] 85 Fed. Reg. 15198 § VII (“Limitations on Distribution”). [7] See 21 U.S.C.A. § 321(h); U.S. Food & Drug Administration, Enforcement Policy for Face Masks and Respirators During the Coronavirus Disease (COVID-19) Public Health Emergency (Revised) (April 2020), at 2-3. [8] Letter from Denise M. Hinton, Chief Scientist, Food & Drug Administration, to Robert R. Redfield, MD, March 28, 2020 (“NIOSH EUA”); Letter from Denise M. Hinton to Stakeholders, March 28, 2020 (“non-NIOSH Imported Respirators EUA”). [9] Id. [10] Id.; see H.R. 6201 § 6005. [11] Letter from Denise M. Hinton to Stakeholders, April 3, 2020 (“Chinese Masks EUA”). [12] Letter from Denise M. Hinton to Jeff Rose, Battelle Memorial Institute, March 29, 2020 (“Battelle EUA”). [13] Recommendation Regarding the Use of Cloth Face Coverings, Especially in Areas of Significant Community-Based Transmission, Centers for Disease Control and Prevention, https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/cloth-face-cover.html (last visited April 5, 2020). [14] U.S. Food & Drug Administration, Enforcement Policy for Face Masks and Respirators During the Coronavirus Disease (COVID-19) Public Health Emergency (Revised) (April 2020) at 4-5. [15] Id. at 5-7. [16] See Antiseptic FDA Letters, U.S. Food & Drug Administration, https://www.fda.gov/drugs/information-drug-class/antiseptic-fda-letters (last visited Apr. 3, 2020); see also 21 C.F.R. § 878.4040 (setting out approval criteria for topical hand sanitizer products). [17] U.S. Food & Drug Administration, Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19): Guidance for Industry (updated March 27, 2020), at 3-5.


For additional questions about  coronavirus-related product liability issues, please visit Gibson Dunn’s Coronavirus Mass Tort Litigation resource page or contact the Gibson Dunn lawyer with whom you usually work, or the authors: Authors:  Richard Mark, rmark@gibsondunn.com, Joe Evall, jevall@gibsondunn.com, and Amanda First, afirst@gibsondunn.com © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. .

March 31, 2020 |
EPA and NHTSA Finalize New Standards for Automobile Fuel Economy and GHG Emissions

Click for PDF On March 31, 2020, the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) issued new standards for automobile fuel economy and greenhouse gas (GHG) emissions for model year (MY) 2021 through MY 2026 vehicles.  The final rule, the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks, requires an annual 1.5% increase in the standards for passenger cars and light-duty trucks sold through MY 2026.[1] Background The regulatory landscape for fuel economy and tailpipe GHG emissions has experienced significant changes in recent years.  In 1975, Congress passed the Energy Policy and Conservation Act (EPCA), which granted the Department of Transportation (DOT) the authority to regulate automobile fuel economy.[2]  DOT delegated this authority to NHTSA, which regulates fuel economy through the Corporate Average Fuel Economy (CAFE) program.[3]  Although state regulations of fuel economy are preempted by EPCA,[4] California and several other states moved to regulate tailpipe GHG emissions in the early 2000s.  The EPA was also poised to begin regulating tailpipe GHG emissions at the federal level after the Supreme Court’s 2007 decision in Massachusetts v. EPA.[5] Against this backdrop, the Obama Administration negotiated the “One National Program” agreement in 2009.  Under the agreement, the EPA and NHTSA agreed to jointly issue fuel economy and GHG emissions regulations and California agreed to defer to the federal standards. In 2012, the EPA and NHTSA issued joint regulations for vehicles sold in MYs 2017–2025, requiring a 5% annual increase in the stringency of the standards.[6]  But the agencies also committed to conduct “a comprehensive midterm evaluation and agency decision-making process for MYs 2022–2025 standards” by April 1, 2018.[7]  The final rule released today is the culmination of the Trump Administration’s midterm evaluation of the Obama Administration’s standards.[8] The EPA and NHTSA announced this planned regulation via a notice of proposed rulemaking (NPRM), published on August 24, 2018.  That NPRM had two primary components.  First, the NPRM proposed freezing the federal CAFE and GHG standards at their MY 2020 levels through MY 2026.[9]  Second, it proposed regulations that would make the federal government the sole regulator of fuel economy and tailpipe GHG emissions.[10]  The latter rulemaking, determining that state GHG and zero-emission vehicle standards are preempted by federal law and withdrawing California’s separate authority to establish such standards under the Clean Air Act, was issued in September 2019.[11] Part two of the joint rulemaking, released today, deals with the stringency of the fuel economy and tailpipe GHG emission standards and the applicable compliance mechanisms. The New Standards The final rulemaking includes several important developments of interest for the automotive industry, and departs in several ways from the action proposed in the August 2018 NPRM.

  • Stringency. The final rule requires an annual 1.5% increase in the stringency of fuel economy and tailpipe GHG emissions standards for vehicles sold in MYs 2021–2026.  This is an increase from the standards proposed in the NPRM (0% annual increase), but a decrease from the Obama Administration’s 2012 standards (5% annual increase).  The agencies project that the new standards will require automakers to achieve, on an average industry fleet-wide basis, 201 grams per mile (g/mi) of CO2 and 40.5 miles per gallon (mpg) by MY 2030.[12]  Factoring in compliance flexibilities, however, the “real-world” requirement is expected to be 33.2 mpg.[13]
  • Compliance Flexibilities. The final rule includes several changes to the programs’ compliance mechanisms.
    • First, the rule extends through MY 2026 a credit that classifies electric vehicles as zero-emissions vehicles, even if the charging sources for those vehicles are GHG-emitting.[14]
    • Second, the rule continues to give automakers credits for reducing GHG leaks from air conditioning systems and for lowering methane and nitrous oxide emissions.[15]
    • Third, the rule removes incentives for advanced technologies in full-size pickup trucks. Starting in MY 2022, automakers will no longer receive credits for producing hybrid, or otherwise over-performing, full-size pickup trucks.[16]
  • Cost-Benefit Analysis. The regulatory analysis published with the final rule projects a range of costs and benefits associated with the rule.  In sum, the agencies project the societal net benefits of the rule to “straddle zero.”[17]  Benefits from the new CAFE and GHG standards are projected to range between $16.1 billion to negative $13.1 billion and between $6.4 billion to negative $22 billion, respectively.[18]  These figures use the projections for the existing 2012 standards as the baseline and project costs and benefits over the lifetime of vehicles sold through MY 2029.
    • Cheaper vehicles. The agencies project that average per-vehicle purchase prices will be reduced by $977 to $1,083.[19]
    • Increased fuel consumption. The agencies project that total fuel consumption will increase by 1.9 to 2.0 billion barrels.[20]
    • Lower technology costs. The agencies project that required technology costs will decrease by $86 to $126 billion.[21]
    • Safer vehicles. The agencies project that automakers will produce safer vehicles under the new standards, leading to as many as 3,244 fewer fatalities and approximately 400,000 fewer injuries.[22]
    • Environmental costs. The agencies project that the new standards will increase CO2 emissions by 867 to 923 million metric tons.[23]
The rule will be published in the Federal Register in approximately one week and will become effective 60 days after its publication. Litigation surrounding the final rule is a near certainty—indeed, California has already signaled its intent to challenge the rule in federal court. _____________________    [1]   The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (March 31, 2020) (Final Rule).    [2]   Pub. L. No. 94-163, 89 Stat. 871 (1975).    [3]   49 U.S.C. § 32902(a).    [4]   49 U.S.C. § 32919.    [5]   549 U.S. 497 (2007).    [6]   2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards, 77 Fed. Reg. 62,624, 62,628 (Oct. 15, 2012).    [7]   Id.    [8]   Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022–2025 Light-Duty Vehicles, 83 Fed. Reg. 16,077 (Apr. 13, 2018).    [9]   The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks, Notice of Proposed Rulemaking, 83 Fed. Reg. 42,986 (Aug. 24, 2018). [10]   Id. [11]   The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, 84 Fed. Reg. 51,310 (Sept. 27, 2019).  The ONP Rule is currently being challenged in the U.S. Court of Appeals for the D.C. Circuit, where Gibson Dunn represents a coalition of automotive manufacturers as Intervenors in support of the rule.  See Union of Concerned Scientists v. NHTSA, No. 19-1230 (D.C. Cir.). [12]   Final Rule at 7. [13]   Final Rule at 23. [14]   Final Rule at 51-55. [15]   Id. [16]   Id. [17]   Final Rule at 9. [18]   Final Rule at 8-9. [19]   Final Rule at 8. [20]   Id. [21]   Id. [22]   Final Rule at 15-16. [23]   Final Rule at 8.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm's Environmental Litigation and Mass Tort Group practice group, or the authors: Raymond B. Ludwiszewski - Washington, D.C. (+1 202-955-8665, rludwiszewski@gibsondunn.com) Rachel Levick Corley - Washington, D.C. (+1 202-887-3574, rcorley@gibsondunn.com) Environmental and Mass Tort Group: Washington, D.C. Stacie B. Fletcher (+1 202-887-3627, sfletcher@gibsondunn.com) Raymond B. Ludwiszewski (+1 202-955-8665, rludwiszewski@gibsondunn.com) Michael K. Murphy (+1 202-955-8238, mmurphy@gibsondunn.com) Daniel W. Nelson - (+1 202-887-3687, dnelson@gibsondunn.com) Peter E. Seley - (+1 202-887-3689, pseley@gibsondunn.com) Los Angeles Matthew Hoffman (+1 213-229-7584, mhoffman@gibsondunn.com) Thomas Manakides (+1 949-451-4060, tmanakides@gibsondunn.com) New York Andrea E. Neuman (+1 212-351-3883, aneuman@gibsondunn.com) Anne M. Champion (+1 212-351-5361, achampion@gibsondunn.com) San Francisco Peter S. Modlin (+1 415-393-8392, pmodlin@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 27, 2020 |
Community Shared Solar: Promising Option For Calif. Builders

Los Angeles partner Abbey Hudson, Los Angeles associate Dione Garlick and Palo Alto associate Collin James Vierra are the authors of “Community Shared Solar: Promising Option For Calif. Builders,” [PDF] published by Law360 on February 26, 2020.

November 13, 2019 |
New York Lengthens the Limitations Period for Public Water Suppliers to Sue for Alleged Water Contamination

Click for PDF Last week, New York Governor Andrew Cuomo signed a new measure lengthening the statute of limitations period for public water suppliers to sue for water contamination.[1] Supporters have characterized this as a “significant blow” to companies alleged to be polluters[2] because it could aid in suing to recover hundreds of millions of dollars for alleged contamination cleanup costs.[3] The new law will take effect immediately.[4] The Old Limitations Period Before last week, New York law set forth a three-year limitations period for claims to recover damages from latent effects of substance exposure, running from “the date of discovery of the injury by the plaintiff or from the date when through the exercise of reasonable diligence such injury should have been discovered by the plaintiff, whichever is earlier.”[5] New York law also provided an independent one-year period (subject to conditions) if the plaintiff did not know the cause of its injuries during the initial three-year period.[6] Officials and environmental advocates criticized this standard as discouraging lawsuits by public water suppliers, in part because of a lag between contamination and discovery[7] and perceived ambiguity over when contamination allegedly occurred.[8] Moreover, prior court rulings applied the general rule that began the statute of limitations period when a “reasonably prudent water provider should have or could have brought the suit.”[9] In the context of public water suppliers alleging contamination, however, the general counsel for the Suffolk County Water Authority explained that such a rule makes it difficult “to know when they should commence the action.” For example, New York courts had held that discovery occurred when, “based upon an objective level of awareness of the dangers and consequences of the particular substance, ‘the injured party discovers the primary condition on which the claim is based.’”[10] “Thus, knowledge of both the ‘dangers and consequences’ posed by contamination and harmful impact” were required.[11] In light of such obstacles, lawmakers complained that it was difficult for public water suppliers to overcome statute of limitations defenses raised by polluters in many cases.”[12] The hurdles presented by the prior limitations period were evident in a recent Second Circuit decision affirming dismissal of claims brought by the Bethpage Water District.[13] The parties took divergent views on the application of New York law, with a company arguing that a “cause of action accrues when the water provider learns that the contamination threatens water quality to such an extent that remedial action must be promptly taken, even if the contamination has not yet reached the water source,” and the District arguing that the limitations period “does not accrue until contamination is actually detected in the water source itself.”[14] Rejecting the District’s argument, the Court dismissed the District’s claims because it had been “aware that the threat of contamination was sufficiently significant to warrant ‘immediate or specific remediation efforts.’”[15] The New Limitations Period The new measure amends the Civil Practice Law and Rules to create a new statute of limitations for actions brought by public water suppliers to recover damages from water contamination.[16] The period begins to run once contamination has been detected in a public water supply, rather than when the contamination occurred.[17] It also clarifies that the statute of limitations period runs from the latest of (1) when a test has detected contamination in the raw water of a well or plant intake sample point in excess of state or federal drinking water limits, or (2) the last action taken by a company contributing to the contamination.[18] “Polluters need to be held responsible for their actions and with this measure we are closing an unacceptable loophole that let them skate for far too long,” Governor Cuomo said in a statement.[19] “This law will equip public water authorities with a desperately needed tool to hold corporate polluters accountable for contaminating our drinking water and ensure these deep-pocketed polluters, not ratepayers, pay the costs of removing contaminants like 1,4-dioxane from our drinking water,” a legislation sponsor said.[20] Conclusion The new measure increases potential challenges for companies alleged to be contributors to contamination. By setting the limitations period to run from the date of the impact on the water supply, this measure lengthens the period in which public water suppliers may sue, and it clarifies certain instances in which discovery will trigger that period to run. Moreover, while the old limitations period will still apply for private plaintiffs,[21] this new measure will nevertheless increase the potential liability of companies faced with allegations that they have contributed to ground water contamination. Moving forward, companies and stakeholders may wish to account for the greater resulting uncertainty about their potential liability risk due to this statute.  _____________________________    [1]  https://www.nystateofpolitics.com/2019/11/173011/.    [2]   https://www.newsday.com/long-island/environment/water-treatment-pollutants-1-4-dioxane-1.31984977.    [3]   https://www.newsday.com/news/region-state/1-4-dioxane-cuomo-gaughran-1.38223403.    [4]   Click here.    [5]   See N.Y. C.P.L.R. 214-c.    [6]   Vincent C. Alexander, Practice Commentaries to C.P.L.R. 214-c (Westlaw 2019).    [7]   https://www.newsday.com/news/region-state/1-4-dioxane-cuomo-gaughran-1.38223403.    [8]   https://www.nystateofpolitics.com/2019/11/173011/; also click here.    [9]   https://www.newsday.com/long-island/environment/water-treatment-pollutants-1-4-dioxane-1.31984977. [10]   Bethpage Water Dist. v. Northrop Grumman Corp., 884 F.3d 118, 125 (2018) (quoting MRI Broadway Rental, Inc. v. U.S. Min. Prods., 92 N.Y.2d 421, 429 (1998)). [11]   Id. [12]   N.Y. State Assembly Mem. In Supp. of Legis., click here. [13]   See Bethpage Water Dist., 884 F.3d at 119. [14]   Id. (emphasis added). [15]   Id. at 128. [16]   See N.Y. C.P.L.R. 214-h. [17]   https://www.newsday.com/news/region-state/1-4-dioxane-cuomo-gaughran-1.38223403; https://www.governor.ny.gov/news/governor-cuomo-signs-legislation-giving-public-water-suppliers-three-year-statute-limitations. [18]   https://www.governor.ny.gov/news/governor-cuomo-signs-legislation-giving-public-water-suppliers-three-year-statute-limitations; see https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A05477&term=2019&Summary=Y&Text=Y. [19]   https://www.governor.ny.gov/news/governor-cuomo-signs-legislation-giving-public-water-suppliers-three-year-statute-limitations. [20]   Id. [21]   See, e.g., Panzo v. Keyspan Corp., 2019 N.Y. Slip Op. 07407 (2d Dep’t Oct. 16, 2019).


Gibson, Dunn & Crutcher’s lawyers are available to assist with any questions you may have regarding these issues. For further information, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Public Policy or Environmental Litigation and Mass Tort practice groups, or the authors: Mylan L. Denerstein - Co-Chair, Public Policy Practice, New York (+1 212-351-3850, mdenerstein@gibsondunn.com) Abbey Hudson - Los Angeles (+1 213-229-7954, ahudson@gibsondunn.com) Seth Rokosky- New York (+1 212-351-6389, srokosky@gibsondunn.com) Please also feel free to contact the following practice group leaders: Environmental Litigation and Mass Tort Group: Daniel W. Nelson - Washington, D.C. (+1 202-887-3687, dnelson@gibsondunn.com) Peter E. Seley - Washington, D.C. (+1 202-887-3689, pseley@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

November 6, 2019 |
Who’s Who Legal Practice Guides Recognize Six Gibson Dunn Attorneys in Capital Markets, Government Contracts, and Environment in 2019

Six Gibson Dunn attorneys were recognized by Who’s Who Legal in their respective fields. The Who’s Who Legal Capital Markets 2019 guide recognized Dallas partner Douglas Rayburn.  The Who’s Who Legal Government Contracts 2019 guide recognized Washington, DC partners Karen Manos and Joseph West. The Who’s Who Legal Environment and Climate Change 2019 guide recognized Los Angeles partner Patrick Dennis, San Francisco partner Peter Modlin and Washington, DC partner Raymond Ludwiszewski. These guides were published in September and October 2019.

September 13, 2019 |
Stacie Fletcher and Katherine Smith Named Among Americas Rising Stars

Euromoney Legal Media Group named two partners to its 2019 Americas Rising Stars list. Washington D.C. partner Stacie Fletcher was named “Best in Environment,” and Los Angeles partner Katherine Smith was awardedBest in Labor & Employment.” The awards were announced on September 12, 2019. Stacie Fletcher represents clients in a wide variety of federal and state litigation, including agency enforcement actions, cost recovery cases, and mass tort actions. Katherine Smith has extensive experience representing employers in individual, representative and class action litigation at both the trial court and appellate level. Her practice focuses on high stakes litigation matters such as wage and hour class actions, whistleblower retaliation cases, and executive disputes.

August 15, 2019 |
Five Partners Named Among Top Women in Litigation

Benchmark Litigation named Perlette Jura, Andrea Neuman, Elizabeth Papez, Deborah Stein and Meryl Young to its 2019 list of the Top 250 Women in Litigation, which recognizes America’s leading female trial lawyers.  The list was published on August 15, 2019. Perlette Jura co-chairs the firm’s Transnational Litigation Group and co-founded the firm’s Aerospace and Related Technologies Group.  She practices complex trial and appellate litigation and has played a key role in a number of the firm’s most high-profile transnational, environmental and technology-driven matters. She also has extensive experience working with the food and beverage, agricultural, aerospace, automotive, emerging technology and energy industries. Deborah Stein routinely represents clients in high-stakes matters, including cybersecurity and trade secrets litigation, securities and consumer class actions, and insurance coverage and business practices disputes.  She devotes a significant part of her practice to representing clients in cases involving the False Claims Act and whistleblower allegations of fraud. Andrea Neuman co-chairs Gibson Dunn’s Transnational Litigation Practice Group.  She is a high-stakes trial lawyer whose victories include billion dollar matters in both international and domestic forums.  Her international work spans Central, South and North America at both the trial and appellate levels.  Domestically, she represents clients in an array of industries nationwide, including oil and gas, food and agriculture, aerospace, technology, accounting, real estate and financial services. Meryl Young is Co-Chair of Gibson, Dunn & Crutcher’s Securities Litigation Practice Group.  She practices complex business and commercial litigation, with an emphasis on securities and merger and acquisition litigation and related government investigations.  She represents companies, directors and officers, and accounting firms in class actions, and professional liability actions in both state and federal courts.  She has also handled a wide variety of other types of business litigation, including cases involving contract disputes, unfair business practices, misappropriation of trade secrets and other business torts, trademark and patent infringement, antitrust, real estate, employment and insurance issues. Elizabeth Papez focuses on high-stakes class actions, complex commercial litigation, and related government investigations and appeals.  As a seasoned litigator and former U.S. Deputy Assistant Attorney General, she has substantial experience representing clients in the financial services, pharmaceutical, consumer, and product sectors.  She regularly handles federal class actions, multidistrict litigation and other complex commercial disputes under federal and state antitrust statutes, banking and securities laws, and false claims acts, as well as parallel regulatory investigations with the U.S. Department of Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Food and Drug Administration.

August 15, 2019 |
Gibson Dunn Lawyers Recognized in the Best Lawyers in America® 2020

The Best Lawyers in America® 2020 has recognized 158 Gibson Dunn attorneys in 54 practice areas. Additionally, 48 lawyers were recognized in Best Lawyers International in Belgium, Brazil, France, Germany, Singapore, United Arab Emirates and United Kingdom.

July 11, 2019 |
Gibson Dunn Ranked in 2019 U.S. Legal 500

Gibson Dunn earned 54 practice area rankings, including 18 top-tier rankings in the 2019 edition of The Legal 500 – United States, and 32 partners were named Leading Lawyers in their respective practices with an additional 15 partners recognized as Next Generation Lawyers and two attorneys recognized as Rising Stars. The firm achieved first-tier rankings in the following categories: Antitrust – Cartel; Antitrust – Civil litigation/class actions: defense; Dispute resolution – Appellate – Courts of Appeals; Dispute resolution – Appellate: Supreme Courts (federal and state); Dispute resolution – Corporate investigations and white-collar criminal defense – advice to corporates; Dispute resolution – Corporate investigations and white-collar criminal defense – advice to individuals; Dispute resolution – General commercial disputes; Dispute resolution – International litigation; Dispute resolution – Securities litigation: defense; Industry focus – Energy transactions: oil and gas; Industry focus – Environment: litigation; Industry focus – Transport: rail and road – litigation; Industry focus – Transport: rail and road – regulation; Labor and employment – Labor and employment disputes (including collective actions): defense; Media, technology and telecoms – Media and entertainment: litigation; Media, technology and telecoms – Outsourcing; Real estate – Land use/zoning; and Real estate. The partners named as Leading Lawyers are Scott Hammond (Antitrust: Cartel), Richard Parker (Antitrust: Cartel, Antitrust – Civil ligation/Class Actions - Defense),  Daniel Swanson (Antitrust: Civil Litigation/Class Actions -  Defense), Allyson Ho, Miguel Estrada and Theodore Olson (Dispute Resolution: Appellate), Reed Brodsky and F. Joseph Warin (Corporate Investigations and White-Collar Criminal Defense), Randy Mastro (Corporate Investigations and White-Collar Criminal Defense, General Commercial Disputes, International Litigation and Leading Trial Lawyer), Deborah Stein (General Commercial Disputes), Perlette Jura (International Litigation), Orin Snyder (Leading Trial Lawyers), Brian Lutz(M&A Litigation Defense), Mark Kirsch (Securities Litigation – Defense),  Karen Manos (Government Contracts), Nicholas Politan (Energy – Renewable/Alternative), Peter Hanlon (Energy Transactions – Conventional Power), Michael Darden (Energy Transactions – Oil and Gas), Patrick Dennis (Environmental Litigation), Andrew Tulumello (Sport), Thomas Dupree Jr. (Transport: Rail and Road – Litigation and Transport: Rail and Road - Regulation), Catherine Conway, Eugene Scalia and Jason Schwartz (Labor and Employment Disputes), Scott Edelman (Media and Entertainment – Litigation), Ruth Fisher (Media and Entertainment - Transactional), Daniel Mummery, Stephen Nordahl and William Peters (Outsourcing), Eric Feuerstein and Jesse Sharf (Real Estate), Amy Forbes and Mary Murphy (Real Estate Land Use/Zoning). The partners named Next Generation Lawyers are Cynthia Richman (Antitrust: Cartel, Civil litigation/class actions and Merger Control), Adam Di Vincenzo (Merger Control), Matthew McGill (Dispute Resolution: Appellate), Anne Champion (International Litigation), Alexander Mircheff (M&A Litigation Defense), Robyn Zolman (Capital Markets Debt Offerings), Justin Stolte (Energy Transactions – Oil & Gas), Stacie Fletcher (Environmental Litigation), Gabrielle Levin and Katherine Smith (Labor and Employment Disputes), Benyamin Ross (Media and Entertainment - Transactional), Daniel Angel (Outsourcing and Technology Transactions), Douglas Champion (Real estate – Land use/zoning) and Noam Haberman and Kahlil Yearwood (Real Estate). The attorneys recognized as Rising Stars are David Schnitzer (Rail and Road: Litigation) and Molly Senger (Labor and Employment Disputes).

June 25, 2019 |
New York State Enacts Sweeping Emissions Reduction Law

Click for PDF Last week, the New York State Legislature passed the Climate Leadership and Community Protection Act, Senate Bill S6599 (“CLCPA”).[1]  It is considered to impose “the most aggressive legal mandate in the country” for emissions reduction.[2]  New York State Governor Andrew Cuomo called the bill “the most aggressive climate change program in the United States of America, period.”[3]  Governor Cuomo is expected to sign it into law. The timing of the CLCPA is notable given that the federal Environmental Protection Agency has just promulgated a rule requiring rather scant emissions reductions.[4]  Indeed, one supporter of the CLCPA remarked that “[a]s the White House continues to put fossil fuels first, this legislation is a model for other states to follow.”[5] New Law Will Apply to Anything Regulators Deem a “Greenhouse Gas” Notably, the CLCPA does not only target carbon emissions.  Instead, it requires emissions reductions of anything regulators deem to be a “greenhouse gas.”  In addition to usual suspects like carbon dioxide and methane, the CLCPA defines the term “greenhouse gas” to include “any other substance emitted into the air that may be reasonably anticipated to cause or contribute to anthropogenic climate change.”[6]  The law thus potentially allows New York to regulate any business that emits substances into the air. Required Aggressive Emissions Reductions The CLCPA requires New York’s Department of Environmental Conservation (“Department”) to promulgate regulations to aggressively and rapidly curtail the emission of anything deemed a greenhouse gas.  By 2030, greenhouse gas emitters must reduce emissions to “60% of 1990 emissions” levels, and by 2050 they must achieve “15% of 1990 emissions” levels.[7]  The regulations requiring these reductions must be promulgated within a year of the CLCPA’s becoming effective.[8]  Already, some have questioned whether businesses in New York, including those in energy and real estate, can meet the goals set forth in the bill.[9] The law also seeks “reduction of emissions beyond eighty-five percent,” and “net zero emissions in all sectors of the economy.”[10]  The details of how these aggressive goals will be met is left to a “state climate action council” (“Council”), which will prepare a “scoping plan” and report within two years of the CCLPA’s becoming effective.[11]  The Council will consist of twenty-two members, including the heads of twelve state agencies “or their designees;” “two non-agency expert members appointed by the governor;” “three members to be appointed by the temporary president of the senate;” “three members to be appointed by the speaker of the assembly;” “one member to be appointed by the minority leader of the senate;” and “one member to be appointed by the minority leader of the assembly.[12]  The Council must “provide meaningful opportunities for public comment” before issuing its recommendations.[13]  Once completed, the Council’s report “shall [be] incorporate[d]” into the “state energy planning board’s” “state energy plan,” which will establish the State’s “clean energy goals” and how to meet them.[14]  The Council is broadly empowered to consider all manner of methods for achieving emissions reductions, including “displacing fossil-fuel fired electricity with renewable electricity,” “land-use and transportation planning,” “establishing appliance efficiency standards, strengthening building energy codes,” and “limit[ing] the use of chemicals” that may “contribute to global climate change.”[15] Alternative Compliance Through Net Zero Emissions Reduction While the CLCPA generally mandates gross emissions reductions, entities may be able to meet their reductions requirements through “an alternative compliance mechanism” under which they would need to achieve “net zero emissions.”[16]  But use of this alternative mechanism will be significantly limited.  First, the Department is left to decide whether to create this alternative compliance structure at all.[17]  Second, to utilize the alternative compliance mechanism, entities must go through “an application process” in which they must demonstrate that “compliance with” the normal emissions limits is not feasible and that they “ha[ve] reduced emission to the maximum extent practicable.”[18] Renewable Energy Requirements for Power Companies Serving End-Users The CLCPA requires New York’s Public Service Commission (“Commission”) to impose new regulations on companies that “secure[] energy to serve the electrical energy requirements of end-use customers in New York.”[19]  These companies will be required to meet demand with renewable energy.  Specifically, such companies regulated by the Commission will have to meet their customers’ needs with at least 70% renewable energy by 2030, and they will need to meet all demand with zero emissions by 2040.[20]  These targets may be suspended or modified if the Commission finds that they will adversely impair safety, existing agreements, or if they cause “arrears or service disconnection.”[21] Conclusion The CLCPA will impose hefty requirements on all industries that contribute to greenhouse gas emissions, including energy, transportation, real estate, and any others that New York’s regulators may identify in deciding which emissions contribute to climate change.  And because of the size of New York’s economy, businesses that operate within New York to any extent will likely need to adjust their operations and compliance structures to meet the CLCPA’s requirements.  Additionally, businesses and other stakeholders may wish to provide comment on how the CLCPA is to be implemented, whether before the Department, the Commission, or the newly-created Council. They may also wish to apply for the alternative net zero emissions compliance channel, or provide comment on what should or should not be considered a greenhouse gas.  Thus, in addition to expending considerable resources to adapt to the new law’s requirements, many businesses may also decide it is necessary to spend resources to engage in the new regulatory processes established by the CLCPA. _______________________    [1]   https://www.nysenate.gov/legislation/bills/2019/s6599    [2]   https://www.politico.com/states/new-york/albany/story/2019/06/19/senate-passes-ambitious-renewable-energy-measure-1067167    [3]   http://nymag.com/intelligencer/2019/06/new-york-state-to-approve-impressive-ambitious-climate-bill.html    [4]   https://www.washingtonpost.com/climate-environment/trump-epa-finalizes-rollback-of-key-obama-climate-rule-that-targeted-coal-plants/2019/06/19/b8ff1702-8eeb-11e9-8f69-a2795fca3343_story.html    [5]   https://www.nysenate.gov/newsroom/press-releases/velmanette-montgomery/senate-democratic-majority-passes-historic-climate    [6]   Senate Bill S6599 § 2.    [7]   Id.    [8]   Id.    [9]   https://www.nytimes.com/2019/06/18/nyregion/greenhouse-gases-ny.html [10]   Id. [11]   Senate Bill S6599 § 2. [12]   Id. [13]   Id. [14]   Id. [15]   Id. [16]   Id. [17]   Id. [18]   Id. [19]   Id. § 4. [20]   Id. [21]   Id.


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