Environmental update

Author: Andrew E. Skroback Publication | June 5, 2018

The US Environmental Protection Agency proposed in late April to limit the scientific studies that it will take into account when writing future agency regulations related to air pollution, toxics and other health risks.

The new approach is to ignore scientific studies where the underlying data is not made available to the public. The agency said this will be a boon for transparency, but thousands of scientists and public health groups have cautioned that it would block EPA from relying on landmark studies on the harmful effects of air pollution and pesticide and chemical exposure because such studies regularly involve confidential medical histories or other proprietary information.

Former EPA administrator Gina McCarthy said the new approach would have prevented EPA from considering studies linking neurological damage to exposure to leaded gasoline. Scientists regularly collect personal data from subjects with a promise to keep it confidential.

McCarthy said, “The best studies follow individuals over time, so that you can control all the factors except for the ones you’re measuring, but it means following people’s personal history, their medical history. And nobody would want somebody to expose all of their private information.”

Under the proposal, no regulation may go into effect unless the scientific data and modeling justifying it is publicly available for review, though the plan allows the administrator discretion to waive the requirements.

EPA said it is proposing to do without scientific data that relies on confidential sources because it wishes to foster openness, balance, and scientific integrity.

The proposal was initially subject to a 30-day comment period, but EPA extended the comment deadline from May 30 to August 17 after multiple scientific groups and other interested parties campaigned to block it from being finalized. The agency has already received thousands of comments about the proposal.

Some in the pesticide and chemical industries have raised concerns that the proposal could prevent the use of studies that support product safety because they rely on proprietary confidential business information. However, EPA indicated it might protect the underlying information if it were confidential business data, meaning EPA might accept studies for which the underlying data are not public as long as the sponsors claim such information is confidential.

A number of critics charge the proposed rule is intended to block the use of confidential medical studies that the agency has previously relied on in setting stricter air quality and other health-based standards.

On May 12, 10 top EPA science advisors issued a memo criticizing the proposal. The authors serve on the EPA science advisory board working group that was set up to look into the issue, and include some members who were appointed by EPA administrator Scott Pruitt. Its authors want EPA to ask the full science advisory board for its view because the “design of the rule appears to have been developed without a public process for soliciting input from the scientific community.”

EPA is not legally obligated to obtain and publicize data underlying the research it considers in fashioning regulations, according to various court cases.

The new proposal comes on the heels of restrictions Pruitt has imposed on who can serve on EPA advisory committees, including barring scientists who received agency grants for their research.

Air permitting

An update of the federal air pollution permitting program for expansions and upgrades at power plants and other facilities — known as the “new source review” program — is now expected to be issued in September.

The update will revise how power plants and other large industrial sources of air emissions calculate changes in their emissions and thereby when they would trigger a requirement to install new air pollution controls.

Pruitt said in late April that EPA would issue a comprehensive new rule that will change how facilities like power plants and boilers calculate the emissions that trigger new pollution control requirements under the program.

NEPA review

Twelve federal agencies signed a memorandum of understanding in April intended to hold federal permitting and environmental review for major infrastructure projects to a two-year timeline.

Key signatories include EPA, the US Army Corps of Engineers, and the Departments of Agriculture, Commerce, Energy, Interior and Transportation.

The MOU implements the “one federal decision” policy established by President Trump in Executive Order 13807 on August 15, 2017.

The designated lead agency for purposes of the environmental review will decide whether a project is a “major infrastructure project.” If so, the memorandum of understanding and the executive order will guide the environmental and permitting review for the project, directing the agencies to streamline the process.

The executive order defines “major infrastructure project” as “an infrastructure project for which (1) multiple authorizations by Federal agencies will be required to proceed with construction, (2) the lead Federal agency has determined that it will prepare an environmental impact statement . . . under the National Environmental Policy Act . . . and (3) the project sponsor has identified the reasonable availability of funds sufficient to complete the project.”

The memorandum of understanding commits the agencies to communicate with one another and project sponsors in a regular, structured manner and to develop a set of best practices.

Cooperating agencies must collaborate with the lead agency to prepare a “permitting timetable” identifying the environmental review and permitting milestones to meet the two-year goal, and the timetable will be made available to the public online. Cooperating agencies have agreed to conduct their own environmental reviews and to make their permitting decisions concurrently with the lead agency’s National Environmental Policy Act review.

Within the two-year timeline, the lead agency must publish a notice of intention to prepare an environmental impact statement, conduct the necessary environmental review, consult with cooperating agencies that are concurrently conducting their own permitting and environmental assessments, prepare the EIS, issue the record of decision, and undertake any other work in the permitting timetable.

The MOU requires agencies to issue all necessary permitting decisions within 90 days after the record of decision.

The executive order requires the White House Office of Management and Budget to track agency performance. It will score agencies and take the scores into account when formulating future budgets that it recommends to Congress. The executive order gives OMB discretion to impose financial penalties on agencies that fail to adhere to the timetable.

WOTUS delayed

EPA pushed back its timeline from August 2018 to September 2019 to propose a replacement for an Obama administration definition of what streams and wetlands are protected under the Clean Water Act.

EPA has already proposed to jettison the more expansive Obama-EPA definition. That proposal is currently being reviewed by the White House Office of Management and Budget. A decision is expected in June with implementation by the end of the year.

Superfund

A US appeals court held in late April that environmental regulators can sue to collect their costs for remediating contaminated property from a buyer who took title in a tax auction.

The Comprehensive Environmental Response Compensation and Recovery Act, known as CERCLA or “Superfund,” provides that a person is not liable for contamination caused by a third party with whom the person has no contractual relationship. While current owners have been found to have disqualifying contractual relationships with prior owners in the chain of title, amendments to CERCLA long ago defined “contractual relationship” to create an “innocent purchaser” defense that allowed a buyer to show that it was not liable under certain circumstances if it conducted due diligence amounting to “all appropriate inquiry,” but did not discover the existing contamination.

Amendments to CERCLA also provided that public entities that take properties through any involuntary transfer or eminent domain acquisition are not in a contractual relationship and, therefore, are not liable. This shields the taxing authority from liability.

In this case, the court rejected a tax buyer’s claims that it had no “contractual relationship” with the owner who caused the contamination and held that even transfers through a taxing district are enough to create the contractual relationship necessary for strict liability under CERCLA.

The tax buyer in the case took title to contaminated property through a tax auction. In California, the government never holds title to, or acquires any possessory interest in, tax-defaulted property sold to a private party at auction. California had already investigated the contamination and determined a remedy, and the state remediated the property and then sued the tax buyer to recover its response costs.

The 9th circuit US court of appeals took an expansive view of the statutory definition of “contractual relationship,” finding that such relationships can be direct or indirect and voluntary or involuntary. Reversing the lower court, it held that even if the transaction could be viewed as more attenuated due to the taxing body’s involvement, there still was a transfer of title and that was sufficient to create the contractual relationship necessary to negate the defense to CERCLA liability.

The take away is that even tax buyers need to perform appropriate environmental due diligence before taking title to try to understand and avoid potential CERCLA liability — at least in western states considered part of the 9th circuit.

The case is California Department of Toxic Substance Control v. Westside Delivery LLC.


Contacts

Andrew E. Skroback

Andrew E. Skroback

Washington, DC