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By Lynn L. Bergeson and Carla N. Hutton

On May 5, 2022, the U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) announced a series of actions intended to secure environmental justice for all Americans. In addition to launching a new Office of Environmental Justice within DOJ, Attorney General Garland also announced a new comprehensive environmental justice enforcement strategy to guide DOJ’s work and an interim final rule that will restore the use of supplemental environmental projects (SEP) in appropriate circumstances.

Consistent with President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad, Associate Attorney General Vanita Gupta issued a comprehensive environmental justice enforcement strategy to guide DOJ’s litigators, investigators, and U.S. Attorneys’ Offices nationwide to advance the cause of environmental justice through the enforcement of federal laws. Developed by DOJ’s Environment and Natural Resources Division (ENRD) in partnership with EPA, the strategy will ensure that the entire DOJ “is using all available legal tools to promote environmental justice.”

DOJ also launched its first-ever Office of Environmental Justice (OEJ) within ENRD. According to DOJ, this new office will be a critical resource as DOJ implements the new comprehensive enforcement strategy. Cynthia Ferguson, an experienced ENRD attorney with more than a decade working on environmental justice issues, will be Acting Director.

Finally, DOJ announced an interim final rule, scheduled to be published in the May 10, 2022, Federal Register, that will restore the use of SEPs in appropriate circumstances and subject to guidelines and limitations set forth in a separate memorandum issued by the Attorney General. In its May 5, 2022, press release, EPA states that SEPs “are local projects that defendants can agree to undertake as part of an enforcement case settlement to help rectify environmental violations. SEPs help to fulfill the goals of the underlying statutes being enforced and can provide important environmental and public health benefits to communities that have been harmed by environmental violations.” SEPs are considered in accordance with EPA’s SEP Policy, which ensures there is a sufficient connection to the violation. The SEP Policy provides for consideration of a defendant’s willingness to implement a SEP as part of EPA’s decision about whether, and on what terms, to settle an enforcement matter, just as EPA has discretion to consider, as appropriate, a defendant’s good faith and cooperation when deciding on a penalty and other terms of a settlement. Publication of the interim final rule in the Federal Register will begin a 60-day comment period.


 

By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) Office of Enforcement and Compliance Assurance (OECA) issued a January 2022 enforcement alert entitled “Violations May Put Ski Wax Users at Risk from Illegal Perfluoroalkyl Substances.” According to the enforcement alert, EPA has identified several high-performance ski wax consumer products that contain perfluorinated chemicals that were not reviewed by EPA for health risks under the Toxic Substances Control Act (TSCA). EPA notes that these wax products are intended for use on sports equipment to enhance the performance of the equipment’s slick surfaces that are in contact with snow. The alert states that:

  • EPA is concerned that recently identified TSCA violations may be putting skiers and wax applicators at risk for exposure to certain persistent and bioaccumulative chemicals; and
     
  • EPA advises sellers of ski wax to ensure that the products they sell do not contain certain perfluorinated chemicals that are not on the TSCA Inventory or have prohibitions on their use in sporting goods.

The enforcement alert states that EPA identified several manufacturers, importers, and sellers that produced or sold ski wax products that included certain perfluorinated chemicals in violation of TSCA, which prohibits the manufacture, processing, or importation of a chemical that is not on the TSCA Inventory or otherwise exempt. TSCA requires anyone who intends to manufacture (including import) a new chemical substance for a non-exempt commercial purpose to submit a premanufacture notice (PMN) at least 90 days prior to the manufacture, import, or processing of the chemical. According to the alert, review of the risks from per- and polyfluoroalkyl substances (PFAS) in ski waxes “is particularly important in light of the potential for ski wax technicians and recreational skiers who apply waxes to the skis to be exposed to PFAS from handling the waxes and from vapors released when the waxes are melted and applied to skis.” The alert notes that PFAS may enter the environment from the use of waxed skis and from the ski wax shavings scraped off during application.
 
The enforcement alert describes the following best practices for assessing whether a wax product contains a new chemical substance: (1) reviewing the product’s safety data sheet (SDS) and comparing the chemical substances against the TSCA Inventory; (2) contacting manufacturers and suppliers for additional chemical identity information where there is uncertainty regarding whether a chemical is on the TSCA Inventory; and (3) contacting EPA via the TSCA Hotline if it remains unclear whether a chemical substance is on the TSCA Inventory.
 
The enforcement alert provides information on EPA’s Audit Policy, under which regulated entities that voluntarily discover, promptly disclose, expeditiously correct, and take steps to prevent recurrence of potential violations may be eligible for a reduction or elimination of any civil penalties that otherwise might apply. The alert states that most violations can be disclosed and processed via EPA’s automated online “eDisclosure” system. According to the alert, many states also offer incentives for self-policing, and EPA suggests checking with the appropriate state agency for more information.


 

By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) announced on March 15, 2021, a settlement requiring Western Reserve Chemical Corp. (WRCC) in Stow, Ohio, to pay a $357,000 civil penalty for violations of chemical data reporting regulations under the Toxic Substances Control Act (TSCA).  EPA claims that from 2012 to 2015, WRCC failed to submit data reports for 18 chemical substances as required by TSCA.  According to EPA, WRCC imports various chemicals for businesses that formulate rubber, plastics, adhesives, sealants, and coatings.  EPA states that the alleged violations “presented a potential harm to the Agency’s ability to maintain accurate and updated information regarding commercially-produced chemicals.”  EPA’s consent agreement and final order with WRCC resolves the alleged violations and requires the payment of a $357,000 civil penalty in installments within 18 months.
 
Information about chemical reporting is available on the TSCA Chemical Data Reporting web page.  EPA notes that the chemical data reports for 2016 to 2019 were due from industry manufacturers by January 29, 2021.  The Substance Registry Services web page offers a search function to find out if a specific chemical is on the TSCA Inventory.


 

By Lynn L. Bergeson and Carla N. Hutton
 
On March 2, 2021, the U.S. Environmental Protection Agency (EPA) announced that it reached a settlement agreement with Brenntag Pacific, Inc. for violations of the Toxic Substances Control Act (TSCA).  According to EPA, Brenntag Pacific, Inc. has corrected the violations and will pay a $128,265 fine.  EPA states that it discovered the violations following inspections at Brenntag Pacific, Inc. facilities in Fairbanks, Alaska, and in Santa Fe Springs, California.  EPA inspectors “found the company failed to submit accurate and timely reports and notification associated with the import and export of nine chemicals.”  According to EPA, between 2012 and 2015, Brenntag Pacific, Inc. failed to report properly the import production volumes and uses of five chemicals as required by the 2016 Chemical Data Reporting (CDR) Rule.  In addition, the company failed to produce first-time export notices for four chemicals between 2016 and 2017.  EPA notes that under TSCA, chemical importers and manufacturers are required to submit CDR information to EPA every four years.  EPA uses these data to track the chemicals being imported into the United States and to assess the potential human health and environmental effects of these chemicals.  In addition, EPA makes the non-confidential business information it receives available to the public.


 

By Lynn L. Bergeson and Carla N. Hutton
 

On May 28, 2020, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) issued a report entitled EPA Toxic Substances Control Act Consent Orders Need Better Coordination.  OIG conducted the evaluation to determine what actions EPA took to verify compliance with the requirements of the 2009 Toxic Substances Control Act (TSCA) Premanufacture Notice Consent Order with DuPont (responsibilities transferred to The Chemours Company in 2015) to prevent the release of GenX chemicals in the Cape Fear River in North Carolina.  OIG notes that GenX chemicals are a type of per- and polyfluoroalkyl substances (PFAS) found in surface water, groundwater, drinking water, rain water, and air emissions.  OIG found insufficient communication and coordination between the two EPA offices responsible for developing and enforcing the consent order requirements designed to reduce risks in the manufacture of GenX chemicals.  Under the 2009 Consent Order, EPA required DuPont to determine how to recover and capture 99 percent of GenX’s manufacturing discharges and air emissions.  The Consent Order was not reviewed or approved by the Office of Enforcement and Compliance Assurance (OECA), which is responsible for conducting inspections to verify compliance, however.  Until June 2017, EPA’s actions to verify compliance with the 2009 Consent Order and new chemicals testing requirements consisted of tracking and reviewing information provided by the manufacturer.  According to OIG, following the local media coverage of the presence of GenX chemicals in the Cape Fear River in 2017, Region 4 and EPA contractors conducted EPA’s first on-site compliance monitoring inspection at the Fayetteville Works facility, which manufactures GenX.  OIG found that the Region 4 inspectors were unaware of the 2009 Consent Order and its requirements until the inspection was requested by EPA headquarters.
 
OIG recommends that EPA establish and implement processes:

  1. For OECA to review and approve the terms and conditions of TSCA Section 5(e) Consent Orders that it is responsible for verifying during compliance monitoring and enforcement activities; and
     
  2. To provide final TSCA Section 5(e) Consent Orders to regions and verify that the regions have the final consent orders.

OIG states that EPA “did not provide an acceptable corrective action for Recommendation 1, and we consider this recommendation unresolved.”  For Recommendation 2, EPA provided an alternative course of action that OIG finds acceptable.  OIG considers Recommendation 2 resolved with corrective action pending.


 

By Lynn L. Bergeson and Carla N. Hutton
 
On May 20, 2020, the U.S. Environmental Protection Agency (EPA) issued a press release announcing a final agreement with Swix Sport USA (Swix) resolving Toxic Substances Control Act (TSCA) violations associated with the importation of noncompliant ski wax products containing per- and polyfluoroalkyl substances (PFAS).  According to the press release, Swix agrees to pay a fine and develop a $1 million educational program to raise awareness in ski communities about PFAS chemicals in ski waxes.  EPA states that Swix violated the TSCA Premanufacturing Notice requirements and Import Certification requirements when it imported ski wax products containing six different PFAS chemicals on at least 83 occasions that were not included on the TSCA Inventory or otherwise exempt for commercial purposes.  Once the chemicals were identified, Swix immediately ceased importation of the products containing the PFAS substances and quarantined products in its control in the United States.
 
Under the terms of the settlement, Swix has agreed to spend approximately $1 million to develop and implement an outreach and training program referred to as a Responsible Waxing Project (RWP) and pay a $375,625 civil penalty.  The RWP is aimed at:  (1) educating the ski racing community about PFAS chemicals in racing waxes and their impact on the environment; and (2) promoting the use of wax alternatives with lower environmental impact, including but not limited to racing waxes that are PFAS-free.  Another objective of the RWP is to educate and motivate the ski racing community to phase out (and ultimately eliminate) the use of PFAS-containing waxes in ski racing beginning with the 2020 ski season.
 
EPA notes that the RWP has several elements, including an education and training component for ski wax technicians on the proper disposal of racing wax shavings and the use of appropriate personal protective equipment (PPE) during the waxing process.  Other RWP elements include:

  • PFAS ski wax education program, including two on-site presentations at a major ski event that attracts more than 10,000 participants;
     
  • Training for wax technicians on the proper use of PPE, proper ventilation, and proper disposal of wax shavings;
     
  • Program for ski wax coaches available online and used at on-site presentations at a minimum of ten events designed for coach certifications;
     
  • Additional outreach to college racing teams and clubs that educates high school and college level skiers about the RWP content;
     
  • A dedicated Swix project manager who oversees the project to completion;
     
  • Website development for all videos created as part of the settlement for technicians, coaches, and teams; and
     
  • Distribution of PFAS alternative wax information materials at a minimum of 50 ski sites.

EPA’s Environmental Appeals Board approved the consent agreement and final order on May 13, 2020.


 

By Lynn L. Bergeson and Carla N. Hutton

The U.S. Environmental Protection Agency (EPA) announced on April 2, 2020, that it sent a letter to all members of Congress to correct the record on its temporary policy regarding enforcement of environmental legal obligations during the COVID-19 pandemic.  EPA states that “[a]s should be apparent to anyone who reads the policy, allegations that EPA ‘will cease all enforcement actions during the coronavirus pandemic’ and that the temporary policy ‘absolves polluters of all responsibility’ are simply not true.”  According to EPA, it expects regulated entities to comply with all obligations, and if they do not, EPA emphasizes that the policy says EPA will consider the pandemic, on a case-by-case basis, when determining an appropriate response.  Furthermore, in cases that may involve acute risks, or imminent threats, or failure of pollution control or other equipment that may result in exceedances, “EPA’s willingness to provide even that consideration is conditioned on the facility contacting the appropriate EPA region, or authorized state or tribe, to allow regulators to work with that facility to mitigate or eliminate such risks or threats.”

EPA states that it is “not unusual for EPA to exercise enforcement discretion to address emergency situations that disrupt normal operations, such as hurricanes.  What is unusual is that the current crisis caused by the COVID-19 pandemic affects the entire nation,” rather that a discrete geographic area.”  According to EPA, it developed the temporary policy to allow it to prioritize its resources to respond to acute risks and imminent threats, rather than making case-by-case determinations regarding routine monitoring and reporting.  EPA notes that the development of the policy was a group effort, involving “multiple calls” and with “drafts shared among EPA staff and managers, both career and political, at both headquarters and in the regions.”  Once the COVID-19 threat has ended, “EPA expects regulated facilities to comply with regulatory requirements, where reasonably practicable, and to return to compliance as quickly as possible.”  Additionally, according to EPA, “the policy makes clear that EPA expects operators of public water systems to continue normal operations and maintenance during this time, as well as required sampling, to ensure the safety of vital drinking water supplies.”

More information on EPA’s temporary policy is available in our March 27, 2020, blog item, “EPA Announces Temporary Enforcement Discretion Policy.”


 

By Lynn L. Bergeson and Carla N. Hutton

The U.S. Environmental Protection Agency (EPA) announced on March 26, 2020, a temporary policy regarding enforcement of environmental legal obligations during the COVID-19 pandemic.  EPA states that its temporary enforcement discretion policy applies to civil violations during the COVID-19 outbreak.  The policy addresses different categories of noncompliance differently.  For example, according to EPA, it “does not expect to seek penalties for noncompliance with routine monitoring and reporting obligations that are the result of the COVID-19 pandemic but does expect operators of public water systems to continue to ensure the safety of our drinking water supplies.”  The policy describes the steps that regulated facilities should take to qualify for enforcement discretion.  To be eligible for enforcement discretion, the policy requires facilities to document decisions made to prevent or mitigate noncompliance and demonstrate how the noncompliance was caused by the COVID-19 pandemic. 

EPA notes that its policy does not provide leniency for intentional criminal violations of law and that it does not apply to activities that are carried out under Superfund and Resource Conservation and Recovery Act (RCRA) Corrective Action enforcement instruments.  EPA states that it will address these matters in separate communications.  The policy states that it does not apply to imports.  According to the policy, EPA is “especially concerned about pesticide products entering the United States, or produced, manufactured, distributed in the United States, that claim to address COVID-19 impacts.”  EPA “expects to focus on ensuring compliance with requirements applicable to these products to ensure protection of public health.”

The policy will apply retroactively beginning on March 13, 2020.  EPA will assess the continued need for and scope of this temporary policy on a regular basis and will update it if EPA determines modifications are necessary.  To provide fair and sufficient notice to the public, EPA states that it will post a notification on its website at least seven days prior to terminating the temporary policy.


 

By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) promulgated a final rule on January 13, 2020, to adjust the level of the maximum (and minimum) statutory civil monetary penalty amounts under the statutes it administers, including the Toxic Substances Control Act (TSCA).  85 Fed. Reg. 1751.  EPA states that this action is mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended through the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act).  The 2015 Act prescribes a formula for annually adjusting the statutory maximum (and minimum) amount of civil penalties to reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law.  EPA notes that the rule does not necessarily revise the penalty amounts that it chooses to seek pursuant to its civil penalty policies in a particular case.  EPA’s civil penalty policies, which guide enforcement personnel on how to exercise EPA’s statutory penalty authorities, take into account a number of fact-specific considerations, e.g., the seriousness of the violation, the violator’s good faith efforts to comply, any economic benefit gained by the violator as a result of its noncompliance, and a violator’s ability to pay.  The final rule was effective January 13, 2020.


 

By Lynn L. Bergeson and Carla N. Hutton
 
On July 5, 2019, the U.S. Court of Appeals for the District of Columbia Circuit rejected an “invitation” to recognize liability under the False Claims Act (FCA) based on a company’s failure to meet a Toxic Substances Control Act (TSCA) reporting requirement and failure to pay an unassessed TSCA penalty.  Kasowitz Benson Torres LLP v. BASF Corp. (No. 1:16-cv-02269).  The court states that the FCA imposes civil liability on anyone who defrauds the federal government of money or property.  Under the FCA, a third party may file suit on behalf of the government and collect a “substantial” bounty if successful.  The law firm Kasowitz Benson Torres LLP (Kasowitz) filed suit in 2016, claiming that several chemical manufacturers violated TSCA by “repeatedly failing to inform” the U.S. Environmental Protection Agency (EPA) of “information regarding the dangers of isocyanate chemicals.”  Kasowitz argued that the manufacturers’ failure to disclose this information and their subsequent actions deprived the government of property (substantial risk information) and money (TSCA civil penalties and contract damages).  The court noted that Kasowitz demanded “billions of dollars in damages, even though the government openly support[ed] the defendants.”  The district court dismissed its lawsuit, and Kasowitz appealed, asking the court “to become the first court to recognize FCA liability based on the defendants’ failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty.  We decline the invitation and affirm the dismissal.”
 
Kasowitz claimed that the defendants -- BASF Corporation, Covestro LLC, Dow Chemical Company, and Huntsman International LLC -- “manufacture isocyanate chemicals, which are used to produce various polyurethane-based materials such as paint, adhesives, rigid foam for insulation, flexible foam for mattresses and cushions, and parts for automotive interiors.”  According to Kasowitz, the defendants acquired information as early as the 1970s about the adverse health effects of isocyanate chemicals.  The companies failed to disclose this information to EPA, however, despite participating in EPA’s Compliance Audit Program.  Kasowitz argued that the companies’ TSCA violations and their failure to pay penalties for those violations deprived the government of its money and property.
 
In its analysis of Kasowitz’s claims, the court describes the allegation that the companies violated FCA’s reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay” money as a non-starter.  The court notes that “[‌i]t is undisputed that the EPA did not assess TSCA penalties against the defendants for failing to report substantial risk information regarding isocyanate chemicals.”  As a result, there was no FCA “obligation” for the companies to conceal or avoid.  In its decision, the court states that once EPA has taken successful administrative action, it has discretion to impose an appropriate civil penalty, including no penalty.  According to the court, two TSCA provisions make this conclusion “inescapable”:  (1) TSCA expressly grants the EPA authority to remit or otherwise decline to impose a civil penalty; and (2) TSCA itself recognizes that not every violation results in a civil penalty.  Under EPA’s Compliance Audit Program, the court states that a company that failed to report substantial risk information faced no additional penalty and was in the same position it would have been had it not participated in the Program at all.  Kasowitz also argued that the companies violated the reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay or transmit” property in the form of substantial risk information.  The court considered whether the TSCA obligation to inform the EPA of substantial risk information qualifies as an obligation to transmit property.  The court “conclude[d] that TSCA does not require the transmission of a property interest.  TSCA gives the EPA one -- and only one -- interest in substantial risk information: the right to be informed of it.”


 
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