The Chemical Compound—June 2017

This quarterly newsletter provides updates on litigation, regulatory, legislative, and other notable developments involving chemicals of concern to business. We presently focus on certain emerging contaminants, including perfluorinated chemicals (PFCs), hexavalent chromium, trichloroethylene (TCE), 1,2,3-Trichloropropane (TCP), and 1,4-dioxane. We hope you find this publication informative, and we welcome your feedback on chemicals of interest to your organization.

Litigation Update

PFCs

Green v. 3M (N.Y. Sup. Ct.)

In March 2017, residents of Suffolk County, New York, sued Suffolk County and manufacturers of Aqueous Film-Forming Foam (AFFF), including 3M, Tyco Fire Products, and National Foam of Pennsylvania, alleging that their drinking water had been contaminated with perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS).¹ According to the complaint, PFOA and PFOS had been detected in private and public wells south of the Air National Guard's 106th Rescue Wing Base and Francis S. Gabreski Airport in Suffolk County in mid-2016. The complaint further alleges that government officials failed to control the use and disposal of PFOA and PFOS at the National Guard Base and Airport, and failed to warn the public that releases of PFOA and PFOS had occurred and could foreseeably contaminate their drinking water. This is but one of several pending lawsuits related to the use of AFFF, as litigation over the product continues to ensnare business and government entities alike.² In another pending suit in the District of Massachusetts, AFFF manufacturers, including 3M, Tyco Fire Products, and United Technologies, moved on June 7, 2017 to dismiss a complaint filed by Barnstable County, which itself had been hit with a suit over groundwater allegedly contaminated with AFFF.

Hexavalent Chromium

Roanoke River Basin Ass'n v. Duke Energy Progress LLC (M.D.N.C.)

The Roanoke River Basin Association filed suit against Duke Energy Progress (Duke Energy) in May 2017 alleging, among other claims, that Duke Energy is discharging coal ash directly into waters of the United States in violation of the Clean Water Act (CWA) and is violating its CWA permit by failing to maintain properly its coal ash site in Roxboro, North Carolina.³ The complaint also alleges that Duke Energy's failure to maintain its coal ash basins in accordance with the terms of its National Pollutant Discharge Elimination System (NPDES) permit has resulted in elevated levels of hexavalent chromium in groundwater measured in the vicinity of the Duke facility. Duke Energy has maintained that the elevated hexavalent chromium levels measured in some parts of North Carolina are unrelated to the presence of coal ash basins.

The Roanoke River Basin Association's lawsuit was filed days after Duke Energy filed suit against the Roanoke River Basin Association in a different federal court, seeking a declaratory judgment regarding Duke Energy's compliance with the CWA.⁴ Duke Energy's lawsuit was filed two days before the end of the 60-day notice period required for citizen suits under the Clean Water Act.⁵

The Roanoke River Basin Association's lawsuit is just the latest in a series of actions by environmental groups aimed at requiring Duke Energy to take action to clean up areas around its 14 unlined coal ash basins in North Carolina.⁶ There are at least 100 coal ash basins across the southeastern United States,⁷ creating the potential for additional litigation related to the cleanup of areas around the basins and alleged hexavalent chromium contamination of groundwater.

Marrow v. Dominion Energy (Va. Cir. Ct.)

Two Virginia residents filed lawsuits in May 2017 alleging that hexavalent chromium, lead, and other metals present in their drinking water migrated from nearby coal ash ponds at the Dominion Energy Possum Point Power Station.⁸ The lawsuits seek $9 million in damages. These lawsuits were filed several months after Dominion Energy agreed to connect residents near the Station to the public water system. Dominion Energy has denied the allegations.

California Mfrs. & Tech. Ass'n v. State Water Res. Control Bd. (Super. Ct. Sacramento County)

On May 5, 2017, the Superior Court of California, Sacramento County issued its decision in a 2014 lawsuit filed by the California Manufacturers & Technology Association (CMTA) and the Solano County Taxpayers Association (SCTA) challenging the state's maximum contaminant level (MCL) for hexavalent chromium. The California Department of Public Health (CDPH) had adopted an MCL for hexavalent chromium of 10 parts per billion (ppb) in July 2014. CMTA and SCTA challenged the MCL on the basis that the CDPH had not adequately considered the economic consequences of the MCL, and the Superior Court agreed. It ordered the California Water Resources Board (now responsible for issuing MCLs) to withdraw the MCL and develop a new MCL for hexavalent chromium. The Water Resources Board is evaluating its next steps, and may choose to appeal the Superior Court's ruling or issue a new MCL with a bolstered economic feasibility analysis.

For more information on this case, please see Peggy Otum and Jonathan Koenig's June 2, 2017 Advisory.

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Federal Regulatory & Legislative Action

Senate Considers Legislation to Amend the Safe Drinking Water Act

In March 2017, New York Senator Kirsten Gillibrand introduced legislation that would require the US Environmental Protection Agency (EPA) to establish MCLs for 1,4 dioxane, perchlorate, and perfluorinated compounds in public water systems within two years after the legislation is enacted.⁹ These substances are not currently regulated under the Safe Drinking Water Act (SDWA). EPA had previously determined that perchlorate meets the SDWA's criteria for regulating a contaminant, and, in so doing initiated the process of regulating perchlorate under the SDWA.¹⁰ Additionally, EPA's 2016 Contaminant Candidate List¹¹ identifies perfluorinated compounds and 1,4 dioxane as substances that may require regulation under the SDWA.¹² However, EPA has yet to issue an MCL for perchlorate, and it has not made a final regulatory determination with respect to perfluorinated compounds or 1,4 dioxane in drinking water. Senator Gillibrand's legislation would require EPA to regulate these substances in drinking water. This legislation is co-sponsored by New York Senator Chuck Schumer and New Hampshire Senator Maggie Hassan.

This legislation is unlikely to become law in the current Congress unless it can attract support from Senate Republicans. However, the legislation suggests that there is still interest on Capitol Hill in amending drinking water standards, and that members of Congress are likely to continue to use proposed legislation to draw attention to drinking water standards.

Senators Petition the Food and Drug Administration to Ban 1,4 Dioxane in Consumer Products

New York Senators Kirsten Gillibrand and Chuck Schumer sent a petition to the Food and Drug Administration (FDA) in April 2017 requesting that FDA prohibit detectable levels of 1,4 dioxane in consumer and children's products like shampoos and soaps. Currently, 1,4 dioxane is not an ingredient in these consumer products, but it is a manufacturing byproduct or trace element that may be present at low levels. In their petition, Senators Gillibrand and Schumer called for the FDA to require companies to use vacuum-stripping technology to remove 1,4 dioxane from these products.¹³

Congressmen Lobby for Perfluorinated Chemicals Health Studies

Congressman Brian Fitzpatrick (PA-8) testified before the House Appropriations Defense Committee in March 2017 to request funding for a comprehensive health study of residents near three military bases in Pennsylvania.¹⁴ The request comes following the discovery of perfluorinated compounds in drinking water near three current and former military bases: the former Naval Air Warfare Center in Warminster, Pennsylvania; the former Naval Air Station-Joint Reserve Base Willow Grove in Horsham, Pennsylvania; and the active Horsham Air Guard Station, also in Horsham, Pennsylvania. Perfluorinated compounds are alleged to have been present in the AFFF used at the bases. Congressman Fitzpatrick's request follows similar action by Congressman Sean Maloney (NY-18), who introduced legislation in February 2017 that would require EPA to conduct a two-year study into the long-term health effects of exposure to perfluorinated compounds.¹⁵ Congressman Maloney's district includes Newburgh, New York, and Stewart Air National Guard Base, which New York's Department of Environmental Conservation had identified as the source of PFOS in the City of Newburgh's water.¹⁶

EPA Set to Issue Scoping Documents for First Risk Evaluations Under Amended TSCA

By June 22, 2017, EPA is expected to issue a "scoping" document for each of the first 10 chemical substances that will be undergoing risk evaluations under the amended Toxic Substances Control Act (TSCA).¹⁷ The scoping document will, as the name suggests, define the "scope" of EPA's risk evaluation of a substance. It will also describe the Agency's health and environmental concerns with the substance, and the conditions of use of the substance that will be examined. The document also could identify potentially exposed or susceptible subpopulations that might be at risk from the substance.¹⁸ If the risk evaluation ultimately concludes that any condition of use of a chemical substance poses an unreasonable risk to human health or the environment, EPA must issue a TSCA Section 6(a) rule regulating the use of the chemical substance, in accordance with deadlines established by the amended TSCA.¹⁹ Thus, for entities that manufacture, use, or rely upon the use of a chemical substance that will undergo a TSCA risk evaluation, the terms of the scoping document will be of considerable interest. The scope of the review also sets in motion "pause preemption," which temporarily limits the states' ability to regulate a substance and its conditions of use while the TSCA risk evaluation is ongoing.²⁰ Thus, the specific terms of the scoping documents will be of interest to states and businesses operating within states contemplating or undertaking their own actions.

For more information about the 10 chemical substances designated by EPA to undergo risk evaluations, please see Lawrence Culleen and Erika Norman's December 1, 2016, Advisory.

Industry Weighs in On Areas for Regulatory Relief

Signals from the Trump Administration that it plans to lessen the burdens on industry from environmental regulations have precipitated a flurry of activity from organizations and companies concerned about the current or prospective changes to the landscape of chemicals regulation. Intensive lobbying has taken several paths.

First, in early 2017, the Department of Commerce sought information on "regulations that adversely impact domestic manufacturers."²¹ In response, the American Chemistry Council (ACC) submitted comments on the EPA Office of Solid Waste and Emergency Response's guidance for the remediation of sites contaminated with trichloroethylene (TCE).²² The ACC specifically pointed to EPA's use of numerically low TCE standards (intended to address acute exposures) as "dramatically" expanding the number of sites at which investigation and remediation will be necessary. Vapor intrusion monitoring alone, they contend, can cost more than $300,000 per non-residential building. As a dramatic example of the increased costs that could be seen if EPA does not reconsider its guidance, the ACC discussed the cleanup of the Middlefield-Ellis-Whisman Superfund Site in Mountain View, California, where vapor intrusion investigation costs are expected to reach $19 million.

Stakeholders have also been weighing in on recent TSCA rules from EPA. EPA issued three proposed TSCA Section 6(a) rules in the final days of the Obama Administration that seek to restrict the use of TCE in aerosol degreasing and spot cleaning,²³ the use of TCE in vapor degreasing,²⁴ and the use of methylene chloride and n-methylpyrrolidone (NMP) in coating removers.²⁵ The comment period for these rules recently closed. The rules were promulgated relying on risk assessments EPA undertook pursuant to its Work Plan Chemicals Program that were completed before the 2016 amendments to TSCA were enacted. EPA has not taken any actions with respect to these rules since the change in administration. Nevertheless, as discussed above, EPA also is in the process of conducting risk evaluations for TCE, methylene chloride, and NMP under the newly amended Section 6(b) prioritization and risk evaluation processes, a presumably more robust procedure than was performed for purposes of supporting the Work Plan Chemicals assessments that support the currently pending Section 6(a) proposals. As a result, many stakeholders will likely be hoping for signs from the new EPA leadership that it intends to wait until these risk evaluations are complete before finalizing the currently proposed Section 6(a) rules.

For further background, please see Lawrence Culleen's September 2016 Advisory discussing EPA's approach for exercising its expanded Section 6 authority under the amended TSCA.

Vapor Intrusion Rulemaking Goes Into Effect

An EPA rule adding subsurface intrusion of contaminants, including vapor intrusion, to the Hazard Ranking System (HRS) took effect on May 22, 2017 after a delay of more than three months. The rule, discussed in further detail in our previous Quarterly Chemical Compound report, was issued in the final days of the Obama Administration. It will allow EPA to place a site on the National Priorities List (NPL) based on subsurface intrusion risks at the site, even if the site would not otherwise qualify for the NPL. The Trump Administration's EPA Administrator, Scott Pruitt, has indicated that Superfund cleanups and program reform are key pieces of his agenda at EPA.²⁶ It remains to be seen how the Administrator's Superfund focus will impact the Agency's implementation of the vapor intrusion rule.

For more information on the Superfund Vapor Intrusion rule, please see Edward McTiernan, Karen Nardi, and Peggy Otum's December 14, 2016, Advisory.

For more information on EPA Administrator Pruitt's focus on the Superfund program, please see Jeremy Karpatkin's May 23, 2017, Advisory.

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State Regulatory & Legislative Action

Activist States, Local Governments Are Regulating Chemicals in Products

Notwithstanding (or perhaps because of) the 2016 TSCA Amendments intended to strengthen federal law regulating chemical substances, certain states and localities have become increasingly active in initiating requirements intended to regulate the use of certain chemicals in products.

Prior to the presidential election last year, Congress enacted significant amendments to TSCA, fueled in part by the commercial sector's desire for strong legislation that might meaningfully preempt state legislative and regulatory actions imposing the proverbial "hodge-podge" of requirements governing chemical substances. Nonconforming state chemical regulations notoriously can impede commercial and consumer-use products that are produced internationally and distributed throughout the US. The resulting amendments to TSCA provide only limited federal preemption, the scope and effect of which diminish and will only be felt when: (i) EPA has taken definitive, final action to restrict specific uses of a substance or has determined that a substance does not present an unreasonable risk to human health or the environment; and (ii) the courts construe the preemptive effect of such actions or determinations in the context of inconsistent state/local actions.

Apparently determined not to be frustrated by federal preemption if and when EPA actions under TSCA produce such an effect, a number of states and localities are continuing their push to identify and target for elimination substances of known toxicity present in consumer products, and particularly those intended for use by children. State legislation has ranged from direct/blanket prohibitions to duties to notify and other obligations. Ingredient disclosure legislation is again under consideration in multiple states and the implementation measures for similar existing statutes are beginning to take shape in others. Municipalities such as New York, San Francisco, and Portland are using their purchasing and procurement authorities to shape the market for products acquired for government purposes. As a consortium of like-minded states share draft legislation and strategize, additional legislation is inevitable. Prominent retailers continue to add credibility to the movement by establishing (and promoting publically) their own standards for the chemical contents of products they will carry.

For more information on enacted and pending state legislation, please see Arnold & Porter's updated state chemical legislation tracker.

North Carolina

State legislators Dana Bumgardner and Kathy Harrington introduced legislation in April 2017 calling on the North Carolina Department of Environment Quality (NCDEQ) to expand its study of hexavalent chromium in drinking water.²⁷ The NCDEQ study previously had been limited to drinking water supplies within a half-mile of a Duke Energy coal ash basin. Duke Energy is currently testing the hexavalent chromium levels in these water supplies in accordance with North Carolina's Coal Ash Management Act. The proposed legislation is aimed at expanding the area of testing near only one of Duke Energy's 14 facilities in North Carolina (seemingly in an area located in the legislative districts of Bumgardner and Harrington).²⁸ If Bumgardner and Harrington's attempt to expand the study area in their legislative districts gains traction, other legislators across the state may seek to achieve similar expansions in their districts.

California

California State Senate Approves "Preserve California" Legislation

On May 30, 2017, the California State Senate approved a package of legislation commonly referred to as the "Preserve California" legislation.²⁹ If signed into law, this package of legislation would make all existing federal environmental regulations enforceable in California, even if the regulations are rolled back by the Trump Administration.³⁰ The California legislation provides that the federal environmental regulations promulgated under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and the Endangered Species Act will remain in effect in California as they existed on January 1, 2016, or January 1, 2017 (whichever date had the stricter regulation). This action is another example of a state taking an activist posture on matters of environmental protection in direct response to indications from the Trump Administration that it intends to roll back federal environmental regulations.

California State Legislature Considers Hazardous Substances Legislation

The California State Assembly is considering two pieces of legislation relating to the regulation of hazardous substances. Assembly Bill 1212 was introduced by Assemblyman Brian Dahle in February 2017.³¹ This bill changes the language of California's Safer Consumer Products (Green Chemistry) law, which requires the California Department of Toxic Substances Control to establish a process to "identify and prioritize" chemicals of concern in consumer products.³² Also in February 2017, Assembly members Phil Ting and Bill Quirk introduced Assembly Bill 958.³³ This bill seeks to prohibit the manufacture, sale, or distribution in commerce of PFOA and PFOS substances with eight or more carbon atoms, and it requires the California Department of Toxic Substances Control to begin adopting regulations for "food contact substances" containing PFOA or PFOS by 2020.

Comment Period Closes on Proposed Rulemaking to Adopt MCL for 1,2,3-TCP

The California State Water Resources Control Board (Water Board) has proposed rulemaking to adopt an MCL for 1,2,3-TCP. A public hearing on the proposed rulemaking was held on April 19, 2017, and the public comment period closed on April 21, 2017. The proposed MCL is .005 micrograms per liter. There is no federal MCL for 1,2,3-TCP, and only one state has set an MCL—Hawaii, at 0.6 micrograms per liter. The state of New Jersey has proposed, but not yet adopted, an MCL for 1,2,3-TCP of 0.03 micrograms per liter.

Michigan

Current drafts of Michigan's fiscal year 2018 budget, approved by the state's House and Senate, indicate that the Michigan Department of Environmental Quality (MDEQ) may not receive additional funding to address vapor intrusion risks across the state.³⁴ Heidi Grether, MDEQ's Director, had requested $2.6 million to address vapor intrusion risks at an estimated 4,000 sites in Michigan,³⁵ and Michigan Governor Rick Snyder had requested $15 million to clean up 7,300 contaminated sites across the state, including 4,000 sites with vapor intrusion risks. However, the current drafts of the budget do not provide for these amounts.

As budget discussions have proceeded, MDEQ has been working with EPA to conduct vapor intrusion testing at homes in Petoskey, Michigan. Officials are concerned that groundwater contaminated with TCE could be causing toxic vapors to enter homes built on a former manufacturing site there.³⁶

New York

New York Launches Household Cleansing Product Information Disclosure Program

The New York State Department of Environmental Conservation (NYSDEC) issued guidance in April 2017 for its "Household Cleansing Product Information Disclosure Program." This program requires manufacturers of household cleansing products sold in New York State to disclose, among other information, a list of each ingredient in their products and any research performed by the manufacturer relating to the effects of the product or its ingredients on human health or the environment. The guidance is currently in draft form, and NYSDEC sought public comment on the draft through June 14, 2017. Once the guidance is finalized, manufacturers will have at least six months to comply with the disclosure requirements. Manufacturers will also be required to revisit their disclosures every two years.³⁷

New York's Budget Targets Emerging Contaminants

The FY2018 New York State budget, signed by Governor Andrew Cuomo in April 2017, includes funds to mitigate "emerging contaminants," like 1,4 dioxane, in drinking water. The budget establishes a Drinking Water Quality Council which will make recommendations to the New York State Department of Health (NYSDOH) about drinking water safety. Additionally, New York State approved the Emerging Contaminants Monitoring Act as part of a package of legislation passed in tandem with the FY2018 budget.³⁸ The Emerging Contaminant Monitoring Act requires all public water systems in New York State to test for emerging contaminants like 1,4 dioxane, even if testing is not required under the federal SDWA. NYSDOH will be responsible for identifying the contaminants that the public water systems must test for.³⁹

New York Notably Designates New State Superfund Site

In May, NYSDEC added the Suffolk County Firematics Training Facility to its list of state Superfund sites.⁴⁰ This designation is notable because it is part of a broader initiative by the State of New York to address perfluorinated compound contamination in the state's water, and it could spawn litigation. NYSDEC and NYSDOH are currently conducting sampling in areas across the state that have been identified as more likely to be affected by perfluorinated compound contamination, based on their proximity to facilities like airports and military installations. New York State has thus far identified at least 250 sites at which perfluorinated compound contamination could have occurred.⁴¹

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© 2017 Arnold & Porter Kaye Scholer LLP. This newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.