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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.


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) Michael Klurfeld - New York (+1 212-351-6370, mklurfeld@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.

April 25, 2019 |
Gibson Dunn Earns 79 Top-Tier Rankings in Chambers USA 2019

In its 2019 edition, Chambers USA: America’s Leading Lawyers for Business awarded Gibson Dunn 79 first-tier rankings, of which 27 were firm practice group rankings and 52 were individual lawyer rankings. Overall, the firm earned 276 rankings – 80 firm practice group rankings and 196 individual lawyer rankings. Gibson Dunn earned top-tier rankings in the following practice group categories: National – Antitrust National – Antitrust: Cartel National – Appellate Law National – Corporate Crime & Investigations National – FCPA National – Outsourcing National – Real Estate National – Retail National – Securities: Regulation CA – Antitrust CA – Environment CA – IT & Outsourcing CA – Litigation: Appellate CA – Litigation: General Commercial CA – Litigation: Securities CA – Litigation: White-Collar Crime & Government Investigations CA – Real Estate: Southern California CO – Litigation: White-Collar Crime & Government Investigations CO – Natural Resources & Energy DC – Corporate/M&A & Private Equity DC – Labor & Employment DC – Litigation: General Commercial DC – Litigation: White-Collar Crime & Government Investigations NY – Litigation: General Commercial: The Elite NY – Media & Entertainment: Litigation NY – Technology & Outsourcing TX – Antitrust This year, 155 Gibson Dunn attorneys were identified as leading lawyers in their respective practice areas, with some ranked in more than one category. The following lawyers achieved top-tier rankings:  D. Jarrett Arp, Theodore Boutrous, Jessica Brown, Jeffrey Chapman, Linda Curtis, Michael Darden, William Dawson, Patrick Dennis, Mark Director, Scott Edelman, Miguel Estrada, Stephen Fackler, Sean Feller, Eric Feuerstein, Amy Forbes, Stephen Glover, Richard Grime, Daniel Kolkey, Brian Lane, Jonathan Layne, Karen Manos, Randy Mastro, Cromwell Montgomery, Daniel Mummery, Stephen Nordahl, Theodore Olson, Richard Parker, William Peters, Tomer Pinkusiewicz, Sean Royall, Eugene Scalia, Jesse Sharf, Orin Snyder, George Stamas, Beau Stark, Charles Stevens, Daniel Swanson, Steven Talley, Helgi Walker, Robert Walters, F. Joseph Warin and Debra Wong Yang.

April 3, 2019 |
U.S. EPA Finalizes New Owner Clean Air Act Audit Program Tailored for the Oil and Natural Gas Sector

Click for PDF On March 29, 2019, the U.S. Environmental Protection Agency finalized the New Owner Clean Air Act Audit Program (the “Program”) for the oil and natural gas sector. Under the Program, new owners of upstream exploration and production sites can seek complete civil penalty mitigation in exchange for auditing their sites for Clean Air Act violations, disclosing any violations, and correcting those violations on an agreed timeline.[1] Opting into the Program. New owners of upstream sites seeking to participate in the program must notify EPA within nine months after acquiring new facilities. Buyers then must consult with the EPA to determine the scope of the audit, including the number of facilities covered. Although EPA strongly encourages new owners to conduct a comprehensive Clean Air Act audit of all applicable statutory and regulatory requirements, the agency has expressed a willingness to entertain proposals for more targeted Clean Air Act compliance audits.[2] Terms of the Program. In announcing the program, EPA provided a template audit agreement outlining the audit process. The template agreement requires, for example, participating new owners to follow an EPA-designed systematic process for estimating vapor control system pressures and vapor flow rates to control devices, and to correct any violations discovered during this process within 180 days of each respective violation’s discovery.[3] Violations discovered outside of the scope of the predesigned process for vapor control systems must be corrected within 60 days of their discovery. Benefits of the Program. Taken as a whole, the requirements of the template audit process may, unlike previous audit policies, require participating new owners to go beyond the requirements of applicable regulations in order to mitigate emissions from storage tanks.[4] Significantly, however, new owners that enter into, and fulfill, all obligations under the template agreement are provided with complete relief from civil penalties. In taking this approach, EPA acknowledged that it was providing for penalty mitigation over and beyond the approach used in preexisting audit guidance (which only allows for mitigation of the “gravity” component of a civil penalty, not the entire civil penalty). Risk Mitigation. EPA’s new audit program provides the upstream oil and gas sector with an option to mitigate enforcement risk by proactively addressing vapor control design issues targeted by a recent EPA enforcement initiative. EPA’s FY19 enforcement goals include an initiative specifically aimed at reducing emissions from storage vessels at upstream sites allegedly resulting from insufficient vapor controls. Under this initiative, EPA already has settled enforcement cases at facilities in Colorado, Oklahoma, Ohio, West Virginia, and Pennsylvania. In one case, the estimated cost of upgrades to vapor control systems and storage vessels resulting from EPA’s efforts was $60 million. Given the potential for substantial civil penalties, the Program may still be an attractive option for new owners seeking to avoid civil penalties or enforcement in spite of the Program’s emissions mitigation requirements.


   [1]   The Program is distinct from, and does not alter, preexisting EPA policies incentivizing industry actors to self-audit their potential pollution (e.g., EPA’s Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations, 65 Fed. Reg. 19,618 (Apr. 11, 2000)). Industry members that prefer the incentive schemes of prior audit policies may still avail themselves of such policies.
   [2]   EPA, Oil and Gas New Owner Program Questions and Answers (Mar. 29, 2019), available at https://www.epa.gov/compliance/oil-and-gas-new-owner-program-questions-and-answers.
   [3]   Id.
   [4]   Dawn Reeves, Lacking Fixes, Oil & Gas Sector Unlikely to Use EPA Penalty Relief Policy, Inside EPA (April 2, 2019), available at https://insideepa.com/daily-news/lacking-fixes-oil-gas-sector-unlikely-use-epa-penalty-relief-policy.

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 or Oil and Gas practice groups, or the authors: Peter S. Modlin - San Francisco (+1 415-393-8392, pmodlin@gibsondunn.com) Michael K. Murphy - Washington, D.C. (+1 202-955-8238, mmurphy@gibsondunn.com) Stacie B. Fletcher - Washington, D.C. (+1 202-887-3627, sfletcher@gibsondunn.com) Kyle Neema Guest - Washington, D.C. (+1 202-887-3673, kguest@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 Patrick W. Dennis (+1 213-229-7568, pdennis@gibsondunn.com) 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) Oil and Gas Group: Michael P. Darden - Houston (+1 346-718-6789, mpdarden@gibsondunn.com) Tull Florey - Houston (+1 346-718-6767, tflorey@gibsondunn.com) Hillary H. Holmes - Houston (+1 346-718-6602, hholmes@gibsondunn.com) Shalla Prichard - Houston (+1 346-718-6644, sprichard@gibsondunn.com) Doug Rayburn - Dallas (+1 214-698-3442, drayburn@gibsondunn.com) Gerry Spedale - Houston (+1 346-718-6888, gspedale@gibsondunn.com) Justin T. Stolte -Houston (+1 346-718-6800, jstolte@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.

January 28, 2019 |
Law360 Names Gibson Dunn Among Its Environmental 2018 Practice Groups of the Year

Law360 named Gibson Dunn one of its five Environmental Groups Of The Year [PDF] for 2018. The firm was recognized for “[scoring] several high-profile victories in environmental litigation in 2018.” The firm’s Environmental practice was profiled on January 28, 2019. For more than 30 years Gibson Dunn has provided counsel on the complete range of legal issues and challenges that arise in environmental and mass tort areas.  Our group’s members represent clients in civil and criminal litigation before U.S. federal and state courts as well as administrative agencies.  The lawyers on our team have been involved in a number of high-profile, precedent-setting matters leading to published decisions that affect or control the interpretation of applicable laws. The group’s lawyers also provide counsel in connection with transactional concerns such as ongoing regulatory compliance, legislative activities and environmental due diligence.

January 13, 2019 |
Gibson Dunn Named a 2018 Law Firm of the Year

Gibson, Dunn & Crutcher LLP is pleased to announce its selection by Law360 as a Law Firm of the Year for 2018, featuring the four firms that received the most Practice Group of the Year awards in its profile, “The Firms That Dominated in 2018.” [PDF] Of the four, Gibson Dunn “led the pack with 11 winning practice areas” for “successfully securing wins in bet-the-company matters and closing high-profile, big-ticket deals for clients throughout 2018.” The awards were published on January 13, 2019. Law360 previously noted that Gibson Dunn “dominated the competition this year” for its Practice Groups of the Year, which were selected “with an eye toward landmark matters and general excellence.” Gibson Dunn is proud to have been honored in the following categories:

  • Appellate [PDF]: Gibson Dunn’s Appellate and Constitutional Law Practice Group is one of the leading U.S. appellate practices, with broad experience in complex litigation at all levels of the state and federal court systems and an exceptionally strong and high-profile presence and record of success before the U.S. Supreme Court.
  • Class Action [PDF]: Our Class Actions Practice Group has an unrivaled record of success in the defense of high-stakes class action lawsuits across the United States. We have successfully litigated many of the most significant class actions in recent years, amassing an impressive win record in trial and appellate courts, including before the U. S. Supreme Court, that have changed the class action landscape nationwide.
  • Competition [PDF]: Gibson Dunn’s Antitrust and Competition Practice Group serves clients in a broad array of industries globally in every significant area of antitrust and competition law, including private antitrust litigation between large companies and class action treble damages litigation; government review of mergers and acquisitions; and cartel investigations, internationally across borders and jurisdictions.
  • Cybersecurity & Privacy [PDF]: Our Privacy, Cybersecurity and Consumer Protection Practice Group represents clients across a wide range of industries in matters involving complex and rapidly evolving laws, regulations, and industry best practices relating to privacy, cybersecurity, and consumer protection. Our team includes the largest number of former federal cyber-crimes prosecutors of any law firm.
  • Employment [PDF]: No firm has a more prominent position at the leading edge of labor and employment law than Gibson Dunn. With a Labor and Employment Practice Group that covers a complete range of matters, we are known for our unsurpassed ability to help the world’s preeminent companies tackle their most challenging labor and employment matters.
  • Energy [PDF]: Across the firm’s Energy and Infrastructure, Oil and Gas, and Energy, Regulation and Litigation Practice Groups, our global energy practitioners counsel on a complex range of issues and proceedings in the transactional, regulatory, enforcement, investigatory and litigation arenas, serving clients in all energy industry segments.
  • Environmental [PDF]: Gibson Dunn has represented clients in the environmental and mass tort area for more than 30 years, providing sophisticated counsel on the complete range of litigation matters as well as in connection with transactional concerns such as ongoing regulatory compliance, legislative activities and environmental due diligence.
  • Real Estate [PDF]: The breadth of sophisticated matters handled by our real estate lawyers worldwide includes acquisitions and sales; joint ventures; financing; land use and development; and construction. Gibson Dunn additionally has one of the leading hotel and hospitality practices globally.
  • Securities [PDF]: Our securities practice offers comprehensive client services including in the defense and handling of securities class action litigation, derivative litigation, M&A litigation, internal investigations, and investigations and enforcement actions by the SEC, DOJ and state attorneys general.
  • Sports [PDF]: Gibson Dunn’s global Sports Law Practice represents a wide range of clients in matters relating to professional and amateur sports, including individual teams, sports facilities, athletic associations, athletes, financial institutions, television networks, sponsors and municipalities.
  • Transportation [PDF]: Gibson Dunn’s experience with transportation-related entities is extensive and includes the automotive sector as well as all aspects of the airline and rail industries, freight, shipping, and maritime. We advise in a broad range of areas that include regulatory and compliance, customs and trade regulation, antitrust, litigation, corporate transactions, tax, real estate, environmental and insurance.

December 21, 2018 |
EPA and the Army Corps of Engineers Propose to Redefine “Waters of the United States” as Regulated Under the Clean Water Act

Click for PDF On December 11, 2018, the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) announced that they will be publishing for public comment a proposed rule to define the scope of waters federally regulated under the federal Clean Water Act (CWA or the Act).[i] This proposal, if finalized, would significantly narrow the scope of waters federally regulated under the CWA, as compared to both the existing Clean Water Rule promulgated by the agencies in 2015 and previous agency guidances addressing the scope of jurisdictional waters. Upon publication in the Federal Register, there will be a 60-day period for the submission of public comments on the proposal.  In addition, the agencies have announced a public hearing on the proposal in Kansas City, MO on January 23, 2019.

Background

The broad objective of the CWA is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters."  33. U.S.C. 1251(a).  In order to meet that objective, the CWA generally makes unlawful the discharge of any pollutant into "navigable waters," which is further defined in the Act to mean the "waters of the United States."  Id. at 1362(7).  This phrase, "waters of the United States," is further defined by regulation, and it is this regulatory definition, and related ones, that the agencies now propose to amend.  See 33 CFR Section 328.3.[ii] Three key Supreme Court decisions have interpreted the phrase "waters of the United States."  U.S. v. Bayview Homes, 474 U.S. 121 (1985), Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001), and Rapanos v. U.S., 547 U.S. 715 (2006).  Notably, the Court in Rapanos issued five separate opinions, none commanding a majority of the Justices.  Justice Scalia authored the plurality opinion, which held that the term "waters of the United States" "include[d] only those relatively permanent, standing or continuously flowing bodies of water. . . " and "wetlands with a continuous surface connection" to a relatively permanent water.  547 U.S. at 739 and 742.  Justice Kennedy, in a concurring opinion, took a different approach, and wrote that the applicable test was whether a water or wetland possessed a "significant nexus" to waters that are or were navigable in fact or that could reasonably be so made.  547 U.S. at 759. In 2015, EPA and the Corps issued a joint rulemaking referred to as the Clean Water Rule, in which they adopted the jurisdictional test espoused by Justice Kennedy.  80 Fed.Reg. 37054 (July 27, 2015).  In connection with this rule, the agencies conducted a peer-reviewed scientific report on hydrologic connectivity to assist in determining the scope of jurisdictional waters using the "significant nexus" test.  The 2015 Clean Water Rule is currently subject to litigation in multiple district courts, and its effect is preliminarily enjoined in twenty-eight states leaving only twenty-two states in which it remains in effect. Shortly after President Trump's inauguration, the President issued Executive Order 13778, directing the agencies to review the 2015 Clean Water Rule, and to issue a proposed rule rescinding or revising it in a manner consistent with Justice Scalia's plurality opinion test in Rapanos, as opposed to Justice Kennedy's "significant nexus" test.  This proposed rule is consistent with that directive.

The Proposed Definition of "Waters of the United States" 

In the current proposal, the agencies interpret the term "waters of the United States" to encompass:
  • traditional navigable waters;
  • tributaries that contribute perennial or intermittent flow to traditional navigable waters;
  • certain ditches;
  • certain lakes and ponds;
  • impoundments of otherwise jurisdictional waters; and
  • wetlands adjacent to other jurisdictional waters.
The proposal excludes, or otherwise limits, several categories of waters or wetlands, from the jurisdictional scope of the CWA, as compared to the 2015 Clean Water Rule.  For example, tributaries (regardless of local names, such as creek, bayou, branch, brook, run, etc.) are jurisdictional only if they contribute perennial or intermittent flow to a traditional navigable water in a typical year either directly or indirectly through other jurisdictional waters.  However, the proposal does not define tributaries to include surface features that flow only in direct response to precipitation, such as ephemeral flows, dry washes, arroyos and similar features, which may have a significant impact on waters predominantly situated in western States.  The proposal also newly defines jurisdictional wetlands as being only those "adjacent" to certain other jurisdictional waters, meaning wetlands that "abut or have a direct hydrologic surface connection to other 'waters of the United States' in a typical year."

Implications and Next Steps

The definition of the phrase "waters of the United States" has broad implications for water quality, public health, and the scope of private party actions for which certain federal permits or approvals are required under the CWA.[iii]  The scope of jurisdictional waters as defined in this proposal also implicates possible actions required under other federal statutes.  For example, because the EPA may issue federal discharge permits for certain discharges of pollutants into "waters of the United States," EPA's proposed issuance of a permit may trigger consultation obligations under the federal Endangered Species Act, or environmental review procedures under the federal National Environmental Policy Act. Once the proposal is formally published in the Federal Register, the public will have sixty days to submit comments.  After review and consideration of any such comments, it is reasonable to expect the agencies to finalize a version of the proposed regulatory definition in 2019, and it is further anticipated that a final rule will be challenged in one or more district courts.

[i] The proposal signed on December 11, 2018 by the EPA Acting Administrator, Andrew Wheeler, and the Assistant Secretary of the Army for Civil Works, R.D. James is a pre-publication version.  The agencies submitted it for publication in the Federal Register, which will constitute the official version once published.
[ii] The phrase "waters of the United States" is referenced in other provisions in the CWA and additional implementing regulations, and the proposed definition would similarly be applied in those contexts.  For example, provisions in the CWA addressing the discharge of oil, the designation of hazardous substances, and the determination of reportable quantities of hazardous substances all contain references to "waters of the United States" which are affected by this proposal.
[iii] This proposal only defines the scope of "waters of the United States" under the CWA.  States may define jurisdictional waters subject to state and local regulation differently, which may trigger non-federal permitting or other requirements.

This client alert was prepared by Avi Garbow, a Co-Chair of Gibson Dunn's Environmental Litigation and Mass Tort practice group. Gibson Dunn's lawyers are available to assist with any questions you may have regarding issues raised in the EPA's and Corps' proposed action to define the scope of waters regulated under the Clean Water Act.  For additional information about the proposed regulatory change, or related litigation, please contact the Gibson Dunn lawyer with whom you usually work or the following leaders of the firm's Environmental Litigation and Mass Tort practice group: Avi S. Garbow (+1 202-955-8558, agarbow@gibsondunn.com) Daniel W. Nelson (+1 202-887-3687, dnelson@gibsondunn.com) Peter E. Seley (+1 202-887-3689, pseley@gibsondunn.com)
© 2018 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 1, 2018 |
U.S. News – Best Lawyers® Awards Gibson Dunn 132 Top-Tier Rankings

U.S. News – Best Lawyers® awarded Gibson Dunn Tier 1 rankings in 132 practice area categories in its 2019 “Best Law Firms” [PDF] survey. Overall, the firm earned 169 rankings in nine metropolitan areas and nationally. Additionally, Gibson Dunn was recognized as “Law Firm of the Year” for Litigation – Antitrust and Litigation – Securities. Firms are recognized for “professional excellence with persistently impressive ratings from clients and peers.” The recognition was announced on November 1, 2018.