On October 18, 2021, EPA Administrator Michael S. Regan announced the PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024 (Roadmap). The Roadmap is intended to be a comprehensive approach to confronting PFAS contamination nationwide. Among many other efforts, the Roadmap includes the following planned actions:

  • Establishing a national primary drinking water regulation for PFOA and PFOS by Fall 2023;
  • Utilizing Effluent Limitations Guidelines (ELGs) and NPDES permits to reduce PFAS discharges;
  • Publishing updated PFAS analytical methods to monitor drinking water by Fall 2024;
  • Designating certain PFAS as CERCLA hazardous substances by Summer 2023;
  • Issuing updated guidance on destroying and disposing of certain PFAS and PFAS-containing materials by Fall 2023;
  • Finalizing new PFAS reporting under TSCA Section 8 by Winter 2022;
  • Strengthening and expanding review and regulation of PFAS under TSCA, including establishing a national PFAS testing strategy this year and reviewing previous decisions on PFAS going forward; and
  • Establishing a PFAS voluntary stewardship program by Spring 2022 to challenge industry to reduce overall releases of PFAS to the environment.

EPA’s plans also include engagement with a wide range of stakeholders to continue to identify collaborative solutions to the PFAS challenge. This process will begin with two national webinars on October 26 and November 2 (registration information can be found by following the hyperlinks). The Roadmap also calls for EPA to continuously meet directly with affected communities to inform implementation of actions under the Roadmap, as well as expanding public education on the known and potential health risks associated with PFAS.

The Roadmap is another step in EPA’s aggressive push to understand and manage PFAS risk across the country and in all media. The Roadmap has a heavy focus on gathering more information, which indicates that EPA is positioning itself to have scientific support to take significant regulatory actions on PFAS in the coming years.

Last week, a shareholder of Danimer Scientific, Inc., filed a derivative suit against the company’s executives and board members, alleging that overstated sustainability claims led to millions of dollars in market capitalization losses.

Danimer manufactures polymers, resins, and plastic alternatives that are used in a number of plastic products. The complaint alleges that the company repeatedly touted the biodegradability of these products, as well as their ability to reduce plastic use and pollution. For one product in particular, Nodax, Danimer claimed that it was fully degradable within 12 to 18 weeks after being discarded. According to a Danimer press release, Nodax is a “100% biodegradable, renewable, and sustainable plastic . . . certified as marine degradable, the highest standard of biodegradability, which verifies the material will fully degrade in ocean water without leaving behind harmful microplastics.” The company made similar representations in an SEC Form S-1 registration statement.

Shortly after these statements went public, The Wall Street Journal published a detailed article refuting Danimer’s biodegradation claims. The article cited experts that were skeptical of whether Danimer’s products could really degrade as quickly as advertised under real-world conditions. The article noted that things like ocean temperature, microorganism variation, and plastic shape and size, will all impact biodegradability and may result in significantly longer timelines for degradation.

The next trading day, Danimer’s stock price dropped by almost 13 percent.

After The Wall Street Journal article was published, Spruce Point published additional reports further supporting the notion that Danimer’s biodegradability claims were too good to be true. The company’s stock price further dropped in the wake of these reports.

Plaintiff, a Danimer stockholder, filed the derivative suit against the company’s CEO and Chairman of the Board, CFO, and a number of the company’s directors. Plaintiff claims that these officers and directors breached their fiduciary duties to the company by intentionally or recklessly allowing these misstatements to occur, which resulted in significant losses. Plaintiff also sued the officers and directors for unjust enrichment, waste of corporate assets, and breaches of the Exchange Act.

While we have yet to see where this litigation will go, the suit itself is another example of how ESG principles are having real consequences on market capitalization—and are finding their way into America’s courtrooms.

The case is Perri v. Croskrey, et al., D. Del., Case No. 1:21-cv-01423.

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Below is an excerpt of an article that was published in ISHN on October 14, 2021.

Most workers in the United States are protected from retaliation for raising workplace health and safety concerns and for reporting work-related injuries or illnesses. While these protections have been in place for decades, the COVID-19 pandemic has led to a record number of complaints from covered employees claiming retaliation by their employer. Since February 2020, the Occupational Safety and Health Administration (OSHA) has received nearly 6,000 whistleblower complaints related to COVID-19 (and OSHA-approved State Plans have received more than 2,000 additional complaints), representing a dramatic increase. Because employee complaints are one of the major triggers for OSHA investigations, it is likely that a whistleblower complaint will lead to an OSHA inspection and investigation. For this, and other reasons, employers should be aware of OSHA’s anti-retaliation law and how to avoid triggering retaliation claims. Read the full article.

On October 1, 2021, the U.S. Environmental Protection Agency (EPA) released its new Draft Strategic Plan for 2022 through 2026 (Strategic Plan). EPA is required to develop the Strategic Plan to communicate EPA’s priorities over the next four years and how EPA will accomplish those priorities. The Biden administration has prioritized environmental justice and the protection of vulnerable populations. In response, earlier this year, EPA announced agency-wide efforts to improve community engagement and input in decision making and enhance protections for communities most impacted by hazardous waste sites, poor air and water quality, and a lack of enforcement. The Strategic Plan reflects this priority throughout its seven goals:

  1. Tackle the Climate Crisis;
  2. Take Decisive Action to Advance Environmental Justice and Civil Rights;
  3. Enforce Environmental Laws and Ensure Compliance;
  4. Ensure Clean and Healthy Air for All Communities;
  5. Ensure Clean and Safe Water for All Communities;
  6. Safeguard and Revitalize Communities; and
  7. Ensure Safety of Chemicals for People and the Environment.

While some of EPA’s goals may not have an obvious connection to environmental justice, the Strategic Plan makes clear that the protection of vulnerable populations is a focus of each of the seven goals. The following are a few examples of EPA’s plans to take action to improve environmental justice:

  • Under Title VI of the Civil Rights Act, EPA is responsible for ensuring that its funding is not used in a way that has discriminatory effect, whether intentionally or unintentionally. EPA plans to be more proactive in policing this responsibility. This will take the form of increased compliance reviews in environmental justice communities. Compliance reviews may include audits of recipients of EPA funding. EPA will also ensure consideration of civil rights by EPA programs.
  • By September 2026, EPA plans to conduct 55 percent of all inspections annually at facilities that trigger “potential environmental justice concerns.” This represents a 100 percent increase from EPA’s current figures.
  • EPA’s Toxics Release Inventory (TRI), which tracks implementation of pollution prevention activities and serves as a critical source of publicly available chemical release and management information, will be improved and expanded to more quickly and accurately identify vulnerable communities near TRI facilities. EPA expects such action will further support pollution prevention initiatives. These initiatives are aimed at reducing the amount of any hazardous substance, pollutant, or contaminant entering a waste stream or released into the environment prior to recycling of discarded material, treatment, or disposal, as well as conserving the use of natural resources.

The Strategic Plan, among other priorities, lays out a holistic agency-wide approach to addressing environmental justice. Facilities operating near communities deemed vulnerable or disadvantaged by EPA should expect to continue witnessing increased inspection activity and greater scrutiny of new and renewed permit applications. Community engagement is also an increased focus for EPA. In addition to an extensive focus on community engagement in the Strategic Plan, it is also a significant focus of EPA’s newly release 2021 Climate Adaption Action Plan. This Plan places a heavy emphasis on engagement, consultation, and partnership with underserved and vulnerable communities and includes environmental justice alongside national security as goals. EPA’s unprecedented focus on environmental justice does not appear to be window dressing and is already impacting the regulated community.

As previously discussed in a post on the Manufacturing Law Blog, the U.S. Securities and Exchange Commission (SEC) is increasing scrutiny of how thoroughly companies evaluate and disclose Environmental, Social, and Corporate Governance (ESG) risk, specifically climate change, and the impacts such risk may have on a company’s operations. In the latest move in this area by the SEC, the Division of Corporation Finance has published a sample letter, and commentary, to demonstrate the types of letters it intends to issue to public companies regarding their climate change disclosures or lack of the same.

The sample letter includes requests for disclosure of material impacts from the physical effects of climate change on operations and results. Examples of such effects include impact of severe weather on property and operations, weather-related impacts to major customers or suppliers, and weather-related impacts on the cost and availability of insurance. Also included is the following general request:

We note that you provided more expansive disclosure in your corporate social responsibility report (CSR report) than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in your CSR report.

While climate change is not explicitly referenced in the SEC’s rules, the SEC has increasingly made it clear that it will be following through with its increased focus on the appropriateness of climate change disclosures. Even if your company does not receive a form of the sample letter from the SEC, now is a good time to use the sample letter to review the appropriateness of your company’s climate change disclosures. Additional information on the SEC’s focus on climate change and ESG risks can be found here.

The latest season of Clean Water Act (CWA) changes are now streaming from the courts and federal agencies. The Biden administration and lower courts have picked up where prior administrations and the U.S. Supreme Court left off, as we reported last year in Binge-Watching the Clean Water Act Cases and Rules. Unless Congress somehow finds bipartisan support for legislative fixes, we expect contentious CWA rulemaking proceedings to resume and protracted CWA litigation to prosper. These actions constrain land developers, utilities and companies with projects or operations that impact wetlands or other water features. These decisions might also give environmental groups and agencies stronger grounds on which to base CWA claims targeting sewers, pipelines, tanks, and other systems that leak or seep wastes into groundwater. Continue Reading Catching Up on the 2021 Clean Water Act Releases

Recently, the Center for Biological Diversity filed a lawsuit against the United States Environmental Protection Agency (EPA), claiming that polyvinyl chloride – more commonly known as PVC or vinyl – should be regulated as a hazardous waste under the Resource Conservation and Recovery Act (RCRA).

The complaint comes seven years after the Center formally petitioned EPA to regulate discarded PVC under both RCRA and the Toxic Substances Control Act (TSCA). Although EPA denied the Center’s petition with respect to TSCA, it never formally responded with respect to RCRA. The Center now seeks an order compelling EPA to act on the 2014 petition.

PVC is one of the world’s most common plastic polymers, and can be found virtually everywhere: building materials, packaging, medical tubing, household products, and electronics, to name a few. According to the complaint, PVC products contain vinyl chloride, a human carcinogen, as well as significant concentrations of chemical additives, such as phthalate plasticizers, known to have toxic, carcinogenic, and mutagenic effects on humans and other life forms. Exposure to these chemicals, the Center claims, “is associated with a broad array of developmental and behavioral abnormalities in humans, fish, and wildlife.”

Designation of PVC as hazardous waste would require revisions to EPA’s solid waste management guidelines and could have major implications for manufacturers and consumers alike.

On August 25, 2021, the Nantucket Residents Against Turbines (ACK RATs) filed a complaint challenging the recent Environmental Impact Statement (EIS) on the proposed Vineyard Wind project to build wind turbines off the southern coasts of Martha’s Vineyard and Nantucket. ACK RATs’ chief concern is the potential impact that the Vineyard Wind project will have on the critically-endangered North Atlantic Right Whale population, which has only approximately 400 individuals remaining. Vineyard Wind signed an agreement in 2019 with various conservation groups, not including ACK RATs, which contains measures to be taken during construction of the wind turbines to lessen the impact on the North Atlantic Right Whale including items such as limiting construction during the whales’ most active months, limiting vessel speeds in the area, and monitoring to ensure construction does not take place when whales are nearby.

ACK RATs’ complaint alleges that various Federal agencies have violated the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). The NEPA claims focus on the alleged failure by the federal Bureau of Ocean Energy Management to analyze alternatives to the Vineyard Winds project, its impacts on the environment, and possible mitigation measures. The ACK RATs also allege that the best available science was not used to prepare the EIS. The final claim alleges that the ESA was violated through failure to ensure that the project will not jeopardize the North Atlantic Right Whale and other endangered species.

While ACK RATs’ complaint may face an uphill battle, a similar lawsuit against the Cape Wind project was able to disrupt that project in 2015. If the complaint is successful, the EIS would likely have to be redone before the Vineyard Wind project could proceed. However, the overall goal of the lawsuit may be to create a situation like the one that led to the Cape Wind project’s downfall or to at least further delay the Vineyard Wind project.

September 2, 2021, the Environmental Protection Agency (EPA), in collaboration with the Department of Defense (DOD), released the first EPA-validated laboratory analytical method to test for per- and polyfluoroalkyl substances (PFAS) in eight different environmental media. Method 1633, currently in draft form, is a single-laboratory validated method to test for 40 PFAS compounds in wastewater, surface water, groundwater, soil, biosolids, sediment, landfill leachate, and fish tissue. Method 1633 complements existing EPA-approved methods to test for 29 PFAS compounds in drinking water and 24 PFAS compounds in non-potable water.

Prior to the release of Method 1633 regulated entities and environmental laboratories relied upon modified EPA methods or in-house laboratory standard operating procedures to analyze PFAS in these environmental media. Method 1633 will likely be used in a variety of applications, including National Pollutant Discharge Elimination System (NPDES) permits. In fact, while Method 1633 is not yet required for Clean Water Act compliance monitoring until EPA promulgates it through rulemaking, EPA has already recommended using Method 1633 in individual NPDES permits.

As Method 1633 is still in draft, it is expected to undergo further refinement by EPA and DOD through a multi-laboratory validation study. EPA and DOD, along with other entities, are also working on more than 130 PFAS-related research efforts. More information and a copy of draft Method 1633 can be found on EPA’s website.

On June 21, 2021, OSHA made big news by publishing its COVID-19 Emergency Temporary Standard for the Healthcare Industry (ETS). While the ETS does not apply to most manufacturing facilities, OSHA also updated its general COVID-19 guidance earlier this month.

This guidance is intended to assist all employers and workers not subject to the ETS in mitigating the spread of COVID-19. The main recommendations in the guidance are summarized below:

  • Workplaces with Fully Vaccinated Employees. Employers no longer need to take as many steps to protect fully vaccinated employees from COVID-19. However, unvaccinated or at-risk workers still need to be protected. As such, employers are strongly advised to support their employees in getting vaccinated by granting them paid time off to receive the vaccine and paid time off to recover from any of vaccine side effects.
  • Protecting Unvaccinated or At-Risk Employees:
    • Work from home. Any COVID-19 infected workers, or ones who have had close contact with someone who tested positive for COVID-19, should work from home, or receive paid time off as needed.
    • Physical distancing. Unvaccinated and at-risk workers should maintain a 6 feet distance from others, or be separated at fixed workstations behind transparent shields or other solid barriers.
    • Facemasks. Employers should provide facemasks at no cost for their unvaccinated and at-risk workers. Employers should also suggest that unvaccinated visitors wear facemasks in the workplace.
  • Other workplace safety guidelines:
    • Educating Employees on COVID-19. Managers should be trained on COVID-19 transmission risks and be frequently updated on any workplace COVID-19 policies. Employees should also be informed of their rights to protection against COVID-19 in the workplace.
    • Ventilation Systems. Employers should maintain adequate ventilation systems. Air filters with a Minimum Efficiency Reporting Value (MERV) 13 or higher should be installed where feasible.
    • Cleaning and disinfection. If someone who has been in the facility within 24 hours is suspected of having or confirmed to have COVID-19, the CDC cleaning and disinfection recommendations should be followed.
    • Record and report. Employers are responsible for recording work-related cases of COVID-19 illness on Form 300 logs. Employers must also follow regulatory requirements when reporting COVID-19 fatalities and hospitalizations to OSHA.
    • Retaliation. No employees should be discharged or discriminated against for raising a reasonable concern about workplace COVID-19 infection, or exercising any of their rights under the COVID-19 policies and procedures.
    • Other applicable mandatory OSHA standards. All of OSHA’s standards that apply to protecting workers from infection remain in place. These mandatory OSHA standards include: requirements for personal protective equipment, respiratory protection, sanitation, protection from bloodborne pathogens, OSHA’s requirements for employee access to medical and exposure records and, of course, the General Duty Clause.

This post is also being shared on our Manufacturing Law Blog. If you’re interested in getting updates on legal news and perspectives and related business issues that are facing manufacturers and distributors, we invite you to subscribe to the blog.