Reflecting on chemicals-related litigation in 2022
This analysis will focus mainly on EPA-related litigation that commenced, ended, or was of interest in 2022. It will also take a short look at some of the private litigation currently pending in the courts that may have a wider impact on chemical regulation in the U.S. The Agency’s litigation strategy has been largely reactive, partially due to understaffing. However, additional funds granted to the EPA through the omnibus and recent bills will likely begin to increase the proactivity of EPA litigation in 2023 and beyond.
BY WALKER LIVINGSTON, ESQ | JAN 11, 2023 8:16 PM EST
- Per- and polyfluoroalkyl substance (PFAS) litigation was chief on the minds of many this past year. A South Carolina based multi-district litigation (MDL) regarding PFAS-containing aqueous film-forming foams (AFFFs) has been heating up over the course of the last couple of years and has gained national attention. The case hit an inflection point in September 2022 when the court denied a motion by defendants, (a collective of manufacturers of the foams) over a government contractor defense, which would have precluded defendants’ potential liability for AFFF-related injuries. In the denial, the court noted that the defendants had greater knowledge than the government about the properties and risk associated with AFFFs and knowingly withheld information about the AFFFs to the government. Three “bellwether” trials are planned that will help decide the fate of the rest of the cases in the MDL, with the first one scheduled for March 2023.
- California Attorney General Rob Bonta filed a wide-ranging suit against PFAS manufacturers in late 2022 (a more in-depth AgencyIQ piece on the suit is available here). The complaint focuses heavily on 3M, Dow, and DuPont (as well as their subsidiaries) in addition to several other companies that produce or produced AFFFs. Bonta names seven different PFAS in the complaint, and seeks to hold defendants liable for cleanup, damages, and remediation costs from PFAS contamination in California via the creation of an abatement fund. As Bonta just began his first full term as Attorney General in the state, it is likely that his office will continue to make the case a major focus of his tenure.
- A lawsuit between the Environmental Protection Agency (EPA) and the American Chemistry Council (ACC) has been stuck in limbo for the last few months over a collective of environmentalist groups requesting to intervene in and become a party to the case (a more in-depth AgencyIQ piece on the suit is available here). The suit, filed by ACC in late July 2022, seeks to overturn PFAS health advisories (HAs) for drinking water issued by the EPA in June 2022. ACC argues that the EPA utilized “scientifically flawed and procedurally improper” data in creating the health advisories, leading to levels “1,000 times below the lowest level that test methods can detect.” The current wrinkle in the case comes from the environmental groups requesting to intervene, a move that both the EPA and the ACC have strongly opposed. The parties briefed the court throughout November and December 2022, and as of early January 2022, the court has not decided whether to allow the environmental groups to intervene in the case over the objections of the ACC and EPA. If the groups join, it could cause issues down the road for settlement or consent decree decisions between EPA and ACC, which is likely the cause of their significant opposition to the intervention.
- The National PFAS Contamination Coalition and several other activist groups filed a lawsuit against the EPA in early 2022, arguing that the EPA violated the 2020 National Defense Authorization Act (NDAA) and the Emergency Planning and Community Right-to-Know Act (EPCRA) when it allowed facility operators to apply a de minimis reporting exemption for PFAS listed in the Toxics Release Inventory (TRI). The NDAA include a specific list of PFAS as well as certain categories of PFAS were included into the TRI effective January 1, 2020, with reporting thresholds significantly lower than the default threshold. These TRI-listed PFAS would normally be required to be reported to the EPA but were released in low enough quantities to avoid reporting obligations. The parties agreed to stay litigation in April 2022, and in August the EPA submitted a proposed rule eliminating the de minimis exemption for PFAS listed in the TRI. In late October, the EPA filed a motion to stay litigation until the final rule is expected to be published (by November 30, 2023). The plaintiffs in the case opposed the extension and argued that the EPA should not be able to shield itself from judicial review of “illegal regulations” (a more in-depth AgencyIQ piece on the suit is available here). However, on January 3, 2023, the U.S. District Court for the District of Columbia denied the plaintiffs’ motion, staying the case until at least July 31, 2023.
- The EPA has not fared well over the past year in pesticide-related lawsuits. The EPA has been reprimanded several times by the courts for its failure to carry out the Endangered Species Act (ESA) related mandates (additional AgencyIQ analysis on the EPA’s ESA issues here). One of the more recent cases of this had the Ninth Circuit Court of Appeals refer to the EPA’s failings as “déjà vu all over again” after the Agency went before the court “once more because of its failure to abide by the law.” The EPA, to its credit, released an ESA Workplan in April 2022, explaining the structural issues that had caused the Agency to miss so many of these deadlines and its plan to achieve compliance. However, the plan will take years to fully implement, and with a significant backlog, it is likely that there will be several more cases where the EPA will be scolded by a Circuit Court for failing to follow through with its ESA mandates.
- The Agency has also been playing “clean-up” on several pesticide registrations released in recent years. In a recent case at the Ninth Circuit, the EPA has requested that the court let the EPA withdraw the registration of a fungicide, difenoconazole, after it had released draft risk assessments for the fungicide in November 2020 and the interim decision in April 2022. The move stems from a June 2022 opinion by the Ninth Circuit which remanded the human health portions of the EPA’s glyphosate registration. In the case, the Ninth Circuit allowed the EPA to re-review (and withdraw) the interim registration for glyphosate. The precedent from the case has now led the EPA to request that Circuits presiding over a pesticide case send the pesticide’s registration back to the EPA for review, rather than vacating the pesticide’s registration. This avenue has proved to be fruitful for the EPA to get something of a “do-over” on pesticide registrations issued in recent years that the EPA may desire to re-review.
- The EPA has also been hit with lawsuits over unanswered petitions, particularly a 2017 petition from the Center for Food Safety that requested that the EPA assess the whole formation of a pesticide, rather than just the active ingredients. The complaint, filed in October 2022, comes after the EPA had not responded to the petition in more than five years.
- Glyphosate, the active ingredient in RoundUp, has had an active year in the courts. As of December 2022, Monsanto and its parent company Bayer have reached settlement in over 100,000 of the about 150,000 pending lawsuits, paying out a total of close to $11 billion. Most recently, the Eleventh Circuit Court of Appeals stated that it would agree to an en banc hearing (where the whole court would hear arguments, rather than a panel of judges) over a glyphosate case after a three-judge panel revived the case after a District Court had initially dismissed it. The move is likely an attempt to push the matter towards the Supreme Court, which Bayer has been unsuccessful with in two other cases in 2022. The EPA also withdrew glyphosate’s interim registration review decision in September 2022, announcing that it would consider additional or different risk mitigation methods were necessary before releasing a final registration review decision in 2026 (a more in-depth AgencyIQ piece on the withdrawal is available here).
- The EPA and National Resources Defense Council (NRDC) have been in and out of court over perchlorate regulations since 2016 when the NRDC sued the EPA over missing deadlines to regulate the chemical. Perchlorate is a naturally-occurring molecule that is also manufactured for the aerospace and defense industries, and exposure can cause prenatal and postnatal issues. This culminated in a consent decree where the EPA would propose perchlorate regulations by 2018 and finalized by 2019. The rule ended up being proposed in 2019, and the NRDC sued over the regulations in the proposed rule. The crux of the NRDC argument rested on one argument that the EPA lacked statutory authority to withdraw a final designation of perchlorate and a second argument focusing on the EPA’s decision process itself. Oral arguments for the case are scheduled for January 27, 2023.
- Additional litigation regarding ethylene oxide is likely coming. Ethylene oxide is a carcinogen with a number of highly important industrial uses, most notably as a sterilizer for medical equipment. After a $363 million verdict against Sterigenics in a trial in September 2022 stemming from the plaintiff’s breast cancer diagnosis, the floodgates may have opened for several cases focused on ethylene oxide that are waiting in the wings. The substantial verdict and increased attention from the government may lead to significantly more regulation for the chemical in the coming years. An AgencyIQ analysis piece on ethylene oxide litigation is available here.
- The Supreme Court issued what may be one of its most impactful decisions in June 2022. West Virginia v. EPA, released on June 30, 2022, covers the power of regulatory agencies to interpret the statutes that give the agency power to make regulations (a more in-depth AgencyIQ piece on the case is available here). In the case, the Court articulated the “major questions doctrine” for the first time, which acts as a buttress against the relative breadth of judicial deference to agency interpretation of regulations. The doctrine states that a court should reject claims of agency authority when the agency’s claimed scope of authority involves an issue of “vast economic and political significance” and Congress has not clearly empowered the agency to address the issue. Although the Court provided examples of issues of “vast economic and political significance,” the Court failed to articulate a specific test for what these issues were. This has led to a significant number of comments or lawsuits including the major questions doctrine as a reason for rescinding or blocking an agency action, with each arguing that the issue is a “major question”, and that the agency does not have the authority to regulate it. As secondary jurisprudence regarding the major questions doctrine bubbles up around the Supreme Court at the District and Circuit Court levels, West Virginia v. EPA may become one of the more important opinions of the last several years. Similarly, in an era where agency interpretive power is held under increasingly close scrutiny by the Supreme Court, the opinion may lead to reduced abilities for agencies to interpret regulations (especially older, more opaque ones) in the future.
- The Supreme Court also heard arguments for Sackett v. EPA in early October 2022, with an opinion expected in June 2023. The case focuses on the definition of “waters of the United States” (WOTUS), a wide-ranging Clean Water Act definition that has been consistently litigated since the Act was passed in 1972. The Supreme Court’s interpretation of the phrase may also be influenced by the EPA’s new definition of WOTUS, finalized on December 30, 2022. If the Supreme Court pares back the definition of WOTUS, it could cause wide swathes of tributaries and wetlands in the U.S. to no longer be considered “waters” of the U.S., meaning that many protections and permitting requirements for those areas would no longer apply. The decision will likely be closely watched from all sides, with the EPA even planning a follow-up rule to its new definition in late 2023, which may work to “clean up” any aspects of the rule that get curtailed by the Supreme Court.
Areas of EPA Focus
- Environmental justice continues to be a constant focus of the EPA. As the Agency implements the Justice40 Initiative, it recently created the Office of Environmental Justice and External Civil Rights, which administers the EPA’s environmental justice and external civil rights priorities. Although environmental justice actions in 2022 were few and far between, the Office is gearing up for a more involved 2023 and onwards, and likely will begin to act more proactively than much of the rest of the EPA’s litigation teams.
- The EPA detailed its fiscal year 2022 enforcement results in a report released in late December 2022. Notably, the enforcement led to over $300 million in penalties, fines, or restitution based on violations in the fiscal year ($154 million of which were civil enforcement penalties). The civil enforcement division also achieved commitments to reduce, treat, or eliminate over 95 million pounds of pollution and over 100 million pounds of hazardous and non-hazardous waste. The division also secured the conclusion of 72 judicial actions (mostly court cases) and nearly 500 judicial consent decrees (a form of settlement agreement).
- The EPA’s criminal enforcement division opened 117 new cases in fiscal year 2022. The division’s overall conviction rate on cases charged was 94%. In total, defendants paid almost $150 million in fines and were required to disgorge about $215 million in illegal proceeds in the fiscal year. Much of this came from the FCA US LLC case, where FCA US LLC (formerly known as the Chrysler Group) was convicted in an emissions cheating scheme for 2014, 2015, and 2016 Jeep Grand Cherokees and Ram 1500 diesel trucks. FCA US LLC was required to pay fines of more than $96 million and forfeit over $203 million in proceeds.
Reflecting on the year
- What words best describe the landscape of chemicals litigation in 2022? “Reactive” and “forward-looking” would be two. The EPA has consistently been reactive, rather than proactive to litigation and structural issues within the Agency due to a variety of distinct reasons, many related to funding. That reactivity has come to be its undoing in many of its cases, by either being chastised by the court for not performing the Agency’s legal obligations, or the Agency itself requesting a “do-over” of yet another regulation that it has been sued over. On the other hand, much of the litigation has been forward-looking, as both the EPA and non-government entities try to plan for an uncertain future. Decisions like West Virginia v. EPA and the upcoming Sackett may define how the EPA works and interprets statutes for decades to come, and the Agency itself, armed with additional funding from the Inflation Reduction Act and Bipartisan Infrastructure Law, has turned its gaze to the future and how it plans to bring itself back into compliance. This year has been significant for the EPA, but the true effects of litigation surrounding the Agency will likely take a few years to be fully realized.
What will 2023 look like for the EPA?
- The Agency will likely receive more scrutiny from Congress. A divided House and Senate, although not directly impacting the Agency in certain ways, will still likely prove to be thorny actor that the EPA will need to consider in many of its more wide-reaching policies. In addition, the EPA’s new and increasing focus on environmental justice, a politically-loaded topic, may lead to pressure from House or Senate Committees in 2023.
- Regarding environmental justice, the EPA will likely take additional steps forward with its new office and will file several lawsuits over Title VI of the Civil Rights Act. The Office of Environmental Justice and External Civil Rights will continue to build up towards full strength and will most become more proactive than much of the rest of the EPA in the coming years.
- PFAS will continue to be a top-level topic for the Agency. Additional PFAS regulations are on the horizon already for 2023, and as public interest in PFAS continues to rise, there are almost certainly going to be more significant regulations announced. PFAS litigation, especially following the initial bellwether trials for the South Carolina AFFF MDL, will only increase.
- Through the Bipartisan Infrastructure Law and the Inflation Reduction Act (and to a lesser extent, the omnibus bill), the EPA has secured significantly more funding than the Agency traditionally has. This funding will likely allow the Agency significantly more “room to breathe,” especially in regard to shoring up drinking water infrastructure and Superfund and brownfield site cleanup and revitalization.
To contact the author of this analysis, please email Walker Livingston ( [email protected])
To contact the editor of this analysis, please email Patricia Iscaro ( [email protected])
Key Documents and Dates