EPA’s Proposed Emissions Standards for Coal and Oil-Fired Power Plants May Set the Stage for New Toxic Tort Litigation over Exposures to Hexavalent Chromium and Other Chemicals

May 2, 2011

On March 16, 2011, the U.S. Environmental Protection Agency (“EPA”) proposed the first national standards to reduce hexavalent chromium, mercury, and other toxic air pollution from coal and oil-fired power plants, also known as electrical generating units (“EGUs”).  The proposed rule is currently working its way through the public hearing process.  Three hearings on the proposed rule, which aims to set technology-based emissions limitation standards for coal and oil-fired EGUs with a capacity of 25 megawatts or higher, have been scheduled for May 24 and May 26.

In addition to setting strict emissions limitations standards, the proposed rule details numerous compliance monitoring processes, including Continuing Emissions Monitoring for numeric standards.  It also provides for emissions testing, parameter monitoring, and fuel analyses for metals and acid gases, while allowing sorbent traps for mercury.  The proposed rule requires that the regulated utilities periodically report to the EPA regarding their emissions reduction efforts and progress.

Human Health Concerns Support the Adoption of the New Rule

In explaining the proposed emissions standards, the EPA has stated that many of the pollutants at issue are known or suspected of causing cancer and other serious health effects, including heart disease and premature death.  The EPA has specifically emphasized that toxic metals emitted from power plants, such as hexavalent chromium, are carcinogenic.  Because the EPA has identified these substances as highly hazardous to human health, and because the proposed rule will drastically reduce the emissions of such substances, the Agency has predicted that the proposed standards will help prevent serious illnesses and health problems for thousands of Americans, including: up to 17,000 premature deaths, 11,000 heart attacks, 120,000 asthma attacks, 12,200 hospital and emergency room visits, 4,500 cases of chronic bronchitis, and 5.1 million restricted activity days.

The Potential Implications of the Proposed Rule on Toxic Tort Litigation

The EPA has estimated that the direct costs to the utilities operating the 1,350 units at 525 power plants to be affected by the proposed rule will be approximately $10.9 billion in 2016 alone.  One potentially significant consequence of the EPA’s proposed standards that has not been fully accounted for, however, is that of the toxic tort litigation likely to be spurred as a result of this initiative.

The EPA’s scientific findings and its issuance of the proposed rule are likely to draw renewed attention to exposures to substances emitted by coal and oil-fired EGUs.  The EPA’s studies and findings with respect to the alleged detrimental human health impacts of the emitted substances will undoubtedly catch the attention of plaintiffs’ attorneys who will attempt to use the findings of the EPA to link EGU emissions to the diseases or injuries of potential plaintiffs.

Recent experience has taught that regulatory findings concerning the harmful effects of a substance and documented emissions and exposures are often closely followed by toxic tort litigation brought by individuals claiming to have been injured as a result.

The monitoring and reporting requirements that the proposed rule imposes on EGUs may very well facilitate the work of plaintiffs’ attorneys in pursuing such actions.  These requirements will have the effect of creating databases of information pertaining to each regulated utility.  These databases will closely track the composition and scope of emissions from the regulated utilities, and they will create an information trail from which plaintiffs’ attorneys can easily pull critical facts and identify potential defendants in toxic tort actions.  Because the monitoring and reporting requirements will closely track each utility’s emissions reduction efforts, a plaintiff’s attorney need not look far to identify the types and quantities of substances emitted by each utility.  In other words, efforts to comply with the new rules can also create a universe of information that will be used against the company in later toxic tort litigation.

To summarize, the EPA’s proposed rule provides plaintiffs’ attorneys with two potential weapons:  (1) scientific findings and conclusions regarding the human health hazards posed by substances commonly emitted by EGUs, including chemicals such as hexavalent chromium that have been favorites of the plaintiffs’ bar; and (2) a repository of information providing details as to the nature and amount of substances emitted by the regulated utilities, which significantly reduces the work that needs to be done to find potential defendants.  The availability of such information has historically served as an impetus for increased toxic tort litigation and created issues in terms of information and witnesses that are the subject of discovery.  All potentially affected EGUs should be aware of this risk and understand that efforts to comply with these new regulations may be the subject of litigation and discovery in the near future.

Additional information on the proposed rule itself and its current status can be found at the EPA website at http://www.epa.gov/airquality/powerplanttoxics/.

Gibson, Dunn & Crutcher’s Environmental Litigation and Mass Tort Practice Group has particular expertise in advising businesses on regulatory compliance issues and in toxic tort litigation surrounding EPA regulations. We also handle a range of other environmental litigation and counseling matters nationwide.

To learn more about the firm’s environmental litigation, please contact the Gibson Dunn attorney with whom you work or the practice group co-chairs:

Patrick W. Dennis – Los Angeles (213-229-7567, [email protected])
Jeffrey D. Dintzer – Los Angeles (213-229-7860, [email protected])
Alan N. Bick – Orange County (949-451-4211, [email protected])
Peter E. Seley – Washington, D.C. (202-887-3689, [email protected])

© 2011 Gibson, Dunn & Crutcher LLP

Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.