The Chemical Compound—January 2018

This quarterly newsletter provides updates to business on litigation, regulatory, legislative, and other notable developments involving chemicals of concern. Our present focus is 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.

Table of Contents

Litigation Update

• 1,4 Dioxane »»
• Hexavalent Chromium »»
• Challenges to TSCA Rules and Procedures »»

Federal Regulatory & Legislative Action

• Office of Management & Budget Reviewing EPA Fees Rule »»
• EPA to Revisit Proposed Amendments to the Significant New Use Rule for Long-Chain Perfluoroalkyl Carboxylate Substances »»
• EPA Updates Vapor Intrusion Screening Level Calculator »»
• EPA Announces Superfund Sites Targeted for "Immediate, Intense Action" »»
• EPA Begins Cross-Agency Effort to Address PFAS »»
• Government Accountability Office Releases Report on Cleanup of Military Bases »»
• Defense Appropriations Provide Funding for PFC Study »»

State Regulatory & Legislative Action

• New York »»
• Washington »»
• California »»
• New Jersey »»
• Michigan »»

Litigation Update

1,4 Dioxane

Suffolk Cty. Water Auth. v. Dow Chemical Co. (E.D.N.Y.)

In December 2017, the Suffolk County Water Authority (SCWA) filed a lawsuit against Dow Chemical Company, Ferro Corporation, Vulcan Materials Company, Procter & Gamble Company, and Shell Oil Company relating to the presence of 1,4 dioxane in drinking water in Suffolk County, New York.¹ The defendants named by SCWA are alleged "manufacturers, distributors, retailers, and promoters" of 1,4 dioxane and 1,4 dioxane-containing products.² The complaint alleges that 1,4 dioxane was used as a stabilizer for chlorinated solvents that were used to clean machined metal products.³ SCWA further alleges that 1,4 dioxane was a byproduct of ethoxylated surfactants used in consumer products like detergents and soaps in the 1950s.⁴ However, beyond alleging that 1,4 dioxane was present in chlorinated solvents used in Suffolk County and was a byproduct of widely used consumer products, the complaint makes no specific claims about how and when 1,4 dioxane entered the drinking water in Suffolk County.

The SCWA alleges six causes of action against the defendants, including strict liability for defective design, strict liability for failure to warn, and nuisance.⁵ The SCWA is seeking compensatory and punitive damages, as well as relief "in the form of a fund to abate the nuisance and trespass."⁶ The Chairman of SCWA has indicated that the goal of this lawsuit, as well as a second lawsuit filed by SCWA relating to alleged perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) contamination of drinking water in Suffolk County, is to recover the costs of treating the drinking water and finding alternative sources of drinking water, if necessary.⁷

Hexavalent Chromium

City of Chicago and Lake Michigan Surfers Sue U.S. Steel

The City of Chicago and The Surfrider Foundation have filed suit against U.S. Steel under the Clean Water Act (CWA) for its alleged contamination of Lake Michigan. Under the Clean Water Act, citizens may sue parties for violations of CWA effluent standards or relevant EPA or state orders.⁸ The City of Chicago initially filed a notice of intent to sue U.S. Steel in November 2017.⁹ Chicago's lawsuit alleges that a U.S. Steel plant in Portage, Indiana spilled more than 300 pounds of hexavalent chromium into Lake Michigan during 2017.¹⁰ The City of Chicago also alleges that U.S. Steel failed to disclose an October 2017 release of hexavalent chromium into Lake Michigan until three weeks after the spill.¹¹ EPA has confirmed that it was not initially informed of the October 2017 spill.¹² The Complaint further alleges that U.S. Steel's failure to report the October 2017 spill prevented it from "initiating [] timely surveillance actions" to protect the City of Chicago's drinking water supply, which serves 5 million people.¹³ The City of Chicago is seeking declaratory and injunctive relief to require U.S. Steel to comply with its Clean Water Act and National Pollutant Discharge Elimination System (NPDES) permits.¹⁴

The Surfrider Foundation, represented by an environmental law clinic at the University of Chicago Law School, has also filed suit against U.S. Steel Corporation alleging violations of the Clean Water Act.¹⁵ The Surfrider Foundation is a non-profit corporation aimed at protection the world's water and beaches.¹⁶ It alleges that some of its members surf on the waves of Lake Michigan.¹⁷ The Surfrider Foundation claims that, as a result of U.S. Steel's alleged pollution of Lake Michigan, its members have begun avoiding certain parts of Lake Michigan, and some members have become ill after surfing in the vicinity of the U.S. Steel facility.¹⁸ The Surfrider Foundation's complaint also alleges that its members are concerned about the effects of the U.S. Steel facility on local drinking water sources.¹⁹ The Surfrider Foundation is seeking declaratory and injunctive relief, including a request that the Northern District of Indiana order U.S. Steel to pay a civil penalty to the United States for violations of the Clean Water Act.²⁰

Ctr. for Biological Diversity v. U.S. Bureau of Land Mgmt. (C.D. Cal.)

In November 2017, the Center for Biological Diversity and Center for Food Safety filed suit against the U.S. Bureau of Land Management (BLM) seeking injunctive relief to prevent the construction of a drinking water pipeline through the Mojave Trails National Monument in California.²¹ The lawsuit alleges that the construction of the pipeline will negatively impact the National Monument, and further alleges that the water set to be transported by the proposed pipeline is likely to be contaminated with hexavalent chromium that "could pose a serious risk to consumers."²²

The County of San Bernardino approved the construction of the pipeline by Cadiz, Inc. in 2012.²³ The Cadiz, Inc. water extraction project would result in the extraction of an estimated 16.3 billion gallons of water annually from an aquifer beneath Cadiz-owned property.²⁴ The complaint alleges that experts have concluded this water would contain levels of hexavalent chromium that "far exceed state and federal safety guidelines."²⁵ The plaintiffs seek an injunction to block the construction of the pipeline and a declaration that BLM violated the Federal Land Policy and Management Act of 1976 by approving the construction of the pipeline.²⁶

Challenges to TSCA Rules and Procedures

Environmental groups continue to use litigation to voice discontent with virtually every action being taken by the Trump-era EPA to implement the 2016 amendments to the Toxic Substances Control Act (TSCA).

Challenges by several environmental organizations, including Earthjustice, the Environmental Defense Fund (EDF), the Natural Resources Defense Council (NRDC), and the Alliance of Nurses for Healthy Environments, to the TSCA Risk Prioritization and Risk Evaluation rules have been consolidated in the Ninth Circuit.²⁷ As discussed in the October 2017 edition of The Chemical Compound, these groups are challenging the TSCA Risk Prioritization and Risk Evaluation rules, both finalized in July 2017, as, "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law…" in violation of the Administrative Procedure Act.²⁸ The Risk Prioritization Rule establishes the process by which EPA will designate chemical substances as high priority or low priority for risk evaluations.²⁹ The Risk Evaluation Rule establishes the process by which EPA will evaluate the risks of chemical substances.³⁰ Industry stakeholders—including the American Chemistry Council, Society of Chemical Manufacturers and Affiliates, and the American Petroleum Institute—have been granted leave to intervene in the challenges.³¹ Opening briefs are due to the Ninth Circuit in these cases in March 2018.³²

EDF's challenge to EPA's TSCA Inventory Notification (Active-Inactive) Requirements Rule (TSCA Inventory Rule) remains pending in the D.C. Circuit.³³ The final TSCA Inventory Rule was published on August 11, 2017.³⁴ This rule requires manufacturers, importers, and processors of chemical substances to retroactively report any substance which was active in U.S. commerce between June 21, 2006 and June 21, 2016, and requires manufacturers, importers, and processors of chemical substances to file a report with EPA going forward if they plan to manufacture, import, or process a chemical substance that has been placed on the "inactive" portion of the TSCA inventory.³⁵ EDF filed a statement of issues in the D.C. Circuit on November 9, 2017, alleging defects with the final rule, including:

• the final rule will allow companies to assert Confidential Business Information (CBI) claims without complying with all of the requirements of the amended TSCA Sections 8 and 14;
• the final rule will exempt chemicals produced solely for export from its requirements, even though TSCA does not provide for such an exemption; and
• the final rule will not require reporting to be completed until 420 days following the publication of the final rule, while TSCA states that the rule must require manufacturers and processors to complete reporting within 180 days after the publication of the rule.³⁶

Although EDF's challenge to the Inventory Reset Rule is still pending, entities that imported or manufactured chemical substances that appear on the TSCA Inventory during the ten-year period prior to June 22, 2016 nevertheless must comply with the requirements of the Inventory Reset Rule not later than February 7, 2018.³⁷ EPA has stated that it will not extend this deadline, and that it expects importers and manufacturers of chemical substances covered by this rule to comply with the February 7, 2018 deadline. Processors will have until October 5, 2018 to complete the reporting requirements.

Most recently, the NRDC filed suit in the Second Circuit to challenge EPA's announcement of the procedures that the Agency will use to review new chemical substances for which notifications must be submitted to EPA prior to the substances entering commerce in the United States.³⁸ The litigants have objected to EPA's decision to implement certain procedures described in a brief "framework" document which has been released to the general public for comment and was described in greater detail during an all-day public meeting held in December 2017.³⁹ The complaint alleges the framework constitutes a final regulation, presumably because EPA already has begun applying the framework. The substance of the plaintiff's objections remain otherwise unclear at this time. The measures EPA has taken to implement the 2016 amendments considerably slowed EPA's review of new chemical notifications, and created a backlog of submissions that were under review, as well as considerable confusion and frustration in the regulated community. However, EPA has been making considerable effort in recent months to improve the new chemicals review process as EPA personnel have gained greater comfort with the requirements of the recent amendments.

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Federal Regulatory & Legislative Action

Office of Management & Budget Reviewing EPA Fees Rule

In late December 2017, the Office of Management and Budget received EPA's proposed rule to establish service fees for the administration of TSCA.⁴⁰ Section 26 of the 2016 Lautenberg Amendments to TSCA gives EPA the authority to require payment from entities subject to the requires of Sections 4 through 6 of the amended TSCA.⁴¹ For example, EPA has the authority to establish fees for submissions made in response to chemical testing requirements, new chemical and new use notification requirements, and risk evaluation and risk management requirements. The fees are intended to offset EPA's costs relating to the implementation of TSCA.⁴² The amount of the proposed fees are unknown at this time. Prior to determining the fees to be imposed, EPA was required to meet with parties that could be subject to the proposed fees.⁴³ EPA held a meeting with stakeholders to discuss potential fees in August 2016.⁴⁴ Pursuant to EPA's First-Year Implementation Plan for the Lautenberg Amendments to TSCA, EPA intended to issue a final rule establishing service fees for the administration of TSCA by June 2017.⁴⁵ However, EPA's Fall 2017 Regulatory Agenda indicates that EPA is aiming for the release of a proposed TSCA service fees rule in February 2018, and the publication of a final rule in September 2018.⁴⁶

EPA to Revisit Proposed Amendments to the Significant New Use Rule for Long-Chain Perfluoroalkyl Carboxylate Substances

EPA is set to revive proposed amendments to the Significant New Use Rule (SNUR) for long-chain perfluoroalkyl substances (LCPFACs). The amendments were initially part of a proposed rule issued in 2015, but the proposal has remained largely dormant since it was announced.⁴⁷ The 2015 SNUR amendments proposed designating as a significant new use the manufacturing (including importing) or processing of an identified subset of LCPFAC chemical substances for any uses that were anticipated to have been discontinued by December 31, 2015, and similarly designating as significant new uses any use in the United States of all other LCPFAC chemicals substances for which there were at that time no known ongoing uses. The proposed amendments would also require reporting prior to importing an article containing LCPFACs or certain perfluoroalkyl sulfonate substances.

EPA intends to reissue certain provisions of the amendments initially proposed in 2015 as a supplemental proposal. The supplemental proposal could include new proposed amendments that were not part of the 2015 proposal. The substance of these amendments is not known at this time. However, stakeholders can expect that, as with previous amendments to SNUR requirements, the proposed requirements will only apply to "new" (i.e., not ongoing) uses. Thus, it will be critical to provide written comments to identify ongoing uses that have continued since the 2015 proposal was announced. Additionally, to the extent the forthcoming proposed amendments will affect the importation or domestic processing of "articles" that contain the targeted substances, the Agency's supplemental proposal will be governed by statutory requirements of the 2016 Lautenberg Amendments to TSCA—requirements that did not exist when EPA first considered amending the SNUR for LCPFACs in 2015. Under the amended TSCA, before EPA may issue a SNUR requiring notification regarding "import or processing of a chemical substance as part of an article or category of articles," the Agency must make an affirmative finding "that the reasonable potential for exposure to the chemical substance through the article or category of articles subject to the rule justifies notification."⁴⁸

EPA Updates Vapor Intrusion Screening Level Calculator

EPA has published an updated Vapor Intrusion Screening Level Calculator (VISL Calculator) reflecting revised Regional Screening Levels (RSLs) that were published in November 2017.⁴⁹ RSLs are calculated based on exposure assumptions and EPA toxicity data, and are used to develop risk assessment guidance for the Superfund program, and during the risk assessment process at Superfund sites.⁵⁰ EPA updated the toxicity values of more than a dozen chemicals in November 2017 based on new information from Provisional Peer Reviewed Toxicity Values for Superfund assessments and the Agency for Toxic Substances and Disease Registry.⁵¹ EPA also removed certain chromates from the list of RSLs, including lead chromate and strontium chromate, concluding that the screening level for hexavalent chromium was a sufficient proxy for other chromates, and that the Agency could handle exceptions on a case-by-case basis.⁵²

The VISL Calculator relies upon RSLs to identify chemical substances that may be toxic through the soil gas vapor intrusion pathway, and to recommend risk-based screening levels for groundwater, soil gas, and indoor air.⁵³ These changes to the RSLs and the VISL Calculator could lead to investigations of vapor intrusion pathways at sites where concentrations of vapor-forming chemicals exceed the RSLs.⁵⁴ Additionally, because EPA has added vapor intrusion to the Hazard Ranking System, sites could potentially be added to the National Priorities List as a result of vapor intrusion risks.⁵⁵

EPA Announces Superfund Sites Targeted for "Immediate, Intense Action"

EPA has identified 21 Superfund sites in need of "immediate, intense action."⁵⁶ EPA Administrator Scott Pruitt previously indicated that an overhaul of the Superfund program was one of his top priorities, and he announced in July 2017 that the Agency was planning to develop a list of priority Superfund sites.⁵⁷ Sites included on the recently announced priority list include the Orange County North Basin site and the Des Moines TCE site. TCE is a primary contaminant at both of these sites.⁵⁸ The Orange County North Basin site is believed to have been contaminated with TCE, 1,4 dioxane, perchloroethene, and 1,1 dichloroethene as a result of past industrial operations in the area.⁵⁹ The Des Moines TCE site was previously owned and operated by Dico, Inc., which used the site for manufacturing and chemical formulation.⁶⁰ In addition to TCE, 1,2-dichloroethane and vinyl chloride are considered contaminants of concern at the site.[[Id.]] The list of priority Superfund sites includes numerous mining sites such as the Anaconda Copper Mine in Nevada and the Bonita Peak Mining District in Colorado.⁶¹

EPA Begins Cross-Agency Effort to Address PFAS

EPA has announced a cross-agency effort to address contamination from per- and polyfluoroalkyl substances across the country.⁶² In its December 4, 2017 announcement, the Agency promised to (1) announce short-term EPA actions to assist local authorities in addressing PFAS contamination; (2) increase coordination with state, local, and tribal authorities; (3) intensify research efforts to identify methods to measure PFAS; and (4) increase communications with state, local, and tribal authorities and the public regarding the health impacts of PFAS. ⁶³ The announcement of the cross-agency effort is one of numerous actions that EPA has taken during the past few years to address PFAS contamination. Other recent actions include the May 2016 EPA health advisory setting a recommended maximum level of 70 parts per trillion (ppt) of PFOA and PFOS in drinking water.⁶⁴

Government Accountability Office Releases Report on Cleanup of Military Bases

In October 2017, the Government Accountability Office (GAO) issued a report examining the Department of Defense's (DOD) response to emerging contaminants at military bases.⁶⁵ The report assesses the extent to which DOD has collected data to determine compliance with drinking water standards and taken action to address elevated levels of PFCs in drinking water at or near military bases. GAO found that at least 16 military installations did not report violations of drinking water standards to the Assistant Secretary of Defense for Energy, Installations, and Environment.⁶⁶ The report also noted that military installations that rely on DOD-treated drinking water had more violations of drinking water standards than military installations that rely on non-DOD-treated drinking water, and criticized DOD for failing to use its drinking water data to determine the cause of this difference.⁶⁷ Following the release of the report, DOD promised to improve its reporting under the Safe Drinking Water Act (SDWA).⁶⁸

The report also discussed DOD actions to address PFC contamination at current or former military installations. DOD has taken steps to address PFC contamination of drinking water on over 260 military installations across the country, including installing treatment systems and provide alternative water sources, at a cost of more than $200 million.⁶⁹ However, DOD has identified almost 400 military installation with suspected PFC contamination.⁷⁰ The report noted that DOD has been unable to determine the total cost of addressing PFC contamination at affected military installations, and recommended that DOD include in its future annual reports to Congress an estimate of the cost of cleaning up emerging contaminants at military installations.⁷¹

Defense Appropriations Provide Funding for PFC Study

President Trump signed a defense appropriations bill in December 2017 that includes $7 million for a Centers for Disease Control and Prevention study regarding the long-term health effects of PFCs in drinking water.⁷² The health study will include an exposure assessment, and will focus on PFC contamination at current and former military installations.⁷³ The inclusion of this study in the bill comes after pressure from legislators like New Hampshire Senators Maggie Hassan and Jeanne Shaheen and Pennsylvania Congressman Brian Fitzpatrick, all of whom represent areas with PFC-contaminated military installations. As discussed in the October 2017 edition of The Chemical Compound, Senators Hassan and Shaheen, along with five other Democratic Senators representing states impacted by PFC contamination on military installations, sent a letter to the Senate Appropriations Committee in August 2017 requesting DOD funds for investigations of PFC contamination at military bases. Additionally, as discussed in the June 2017 edition of The Chemical Compound, Congressman Fitzpatrick testified before the House Committee on Appropriations Defense Subcommittee in March 2017 to request funding for a health study of residents near three military bases in his district in Pennsylvania.

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State Regulatory & Legislative Action

New York

The 2017-2018 New York State budget established the Drinking Water Quality Council (DWQC or Council) to offer guidance to the New York State Department of Health regarding emerging contaminants, including recommending a "notification level" for emerging contaminants and determining whether emerging contaminants should be subject to monitoring requirements.⁷⁴ The Council is comprised of employees of the New York State Department of Health and New York State Department of Environmental Conservation, as well as the Superintendent of the Massapequa Water District, and professors with expertise in public health and civil engineering.⁷⁵ DWQC held its first meeting in October 2017, focusing on 1,4 dioxane contamination of groundwater on Long Island.⁷⁶ The DWQC is required to recommend an enforceable guideline for 1,4 dioxane in groundwater in 2018.⁷⁷

Washington

In September 2017, the Washington Department of Ecology added 20 compounds to the Children's Safe Products Reporting list. Manufacturers are required to report annually to Washington about the presence and use of chemicals on the list in children's products offered for sale in Washington state.⁷⁸ Among the chemicals added to the Children's Safe Products Reporting list are PFOA, bisphenol F, and decabromodiphenyl ethane (DBDPE).⁷⁹ Bisphenol F is commonly used in children's bottles and cups, and DBDPE is a common flame retardant.⁸⁰ Manufacturers of children's products that are offered for sale in Washington and that contain chemicals on the Children's Safe Products Reporting list are required to report information regarding the category of product (such as toys or clothes), which component of the product contains the listed chemical, the concentration of the chemical, and the function of the chemical.⁸¹

California

California listed PFOA and PFOS as developmental toxicants under Proposition 65 in November 2017.⁸² California first issued a notice of intent to list PFOA and PFOS under Proposition 65 in September 2016.⁸³ In order to list a chemical under Proposition 65, an "authoritative body" must determine that the chemical causes reproductive toxicity.⁸⁴ EPA is considered an authoritative body under Proposition 65.⁸⁵ The notice of intent to list PFOA and PFOS under Proposition 65 identified four EPA documents which the California Office of Environmental Health Hazard Assessment (California OEHHA) states, "contain conclusions about the developmental toxicity of PFOA… [and] PFOS."⁸⁶ The American Chemistry Council has expressed opposition to California OEHHA's reliance on these EPA documents to list PFOA and PFOS under Proposition 65 on the basis that the documents are only intended as guidance documents, and EPA has not issued regulations designating PFOA and PFOS as reproductive toxicants.⁸⁷ The listing of PFOA and PFOS under Proposition 65 creates labeling requirements for businesses that may expose persons to these chemicals. Businesses that may expose persons to PFOA or PFOS either through consumer products, occupational exposure, or through environmental exposure like water, soil, or ail, must provide "clear and reasonable warning[s]" about the potential negative health impacts of exposure.⁸⁸

New Jersey

The New Jersey Department of Environmental Protection (NJDEP) announced in November 2017 that it will set formal maximum contaminant levels (MCL) for PFOA and perfluorononanoic acid (PFNA) drinking water.⁸⁹ The Department will set MCLs of 14 ppt of PFOA and 13 ppt of PFNA in drinking water.⁹⁰ New Jersey first issued drinking water guidance for PFOA in drinking water in 2007, and at that time recommended a drinking water standard of 40 ppt.⁹¹ Both New Jersey's past guidance and new MCL for PFOA in drinking water are substantially lower than EPA's health advisory for PFOA, which recommends an MCL of 70 ppt for drinking water.⁹² NJDEP's adoption of formal MCLs for PFOA and PFNA will require water utilities to test for these chemical substances, and to take corrective action to address drinking water that exceeds an MCL.⁹³ The NJDEP standard faced some pushback from the Atlantic City Municipal Utilities Authority and the Chemistry Council of New Jersey, an industry group.⁹⁴ The Atlantic City Municipal Utilities Authority argued that it would be difficult for utilities to monitor for such low concentrations of PFOA and PFNA, while the Chemistry Council argued that the standard for PFNA was not supported by scientific evidence.⁹⁵

Michigan

Michigan Governor Rick Snyder recently signed a bill authorizing $23 million in spending to cleanup PFAS contamination at 28 sites in Michigan.⁹⁶ One of the sites targeted for cleanup is the Wolverine World Wide site.⁹⁷ PFAS contamination has been found in the groundwater near the Wolverine World Wide site in excess of 490,000 ppt, and in the Rogue River in excess of 12,000 ppt.⁹⁸ As discussed in further detail below, the state of Michigan has now filed a lawsuit against Wolverine World Wide relating to this contamination. Following the detection of these levels of PFAS near the Wolverine Worldwide Site, Governor Rick Snyder also formed a PFAS task force intended to coordinate the state's response to PFAS contamination.⁹⁹

In December 2017, Michigan State Representative Winnie Brinks and six other Democratic members of the Michigan legislature introduced legislation that would set a drinking water standard of 5 ppt for per- and polyfluoroalkyl substances.¹⁰⁰ If the standard becomes law, Michigan would have the lowest drinking water standard for these substances in the country.¹⁰¹ State Representative Brinks has acknowledged that the 5 ppt standard may not be the perfect drinking water standard, but said she has introduced the legislation because she does not believe the EPA-suggested drinking water limit of 70 ppt is protective enough of human health, and she is hoping to start a conversation about the appropriate standard for PFAS in drinking water.¹⁰²

Then, in January 2018, the Michigan Department of Environmental Quality announced that it was establishing drinking water standards for PFOA and PFOS of 70 ppt.¹⁰³ The establishment of these drinking water standards allows the state to issue notices of violation and take legal action against parties in violation of the standard.¹⁰⁴ The State of Michigan made quick use of its new authority to take legal action against parties in violation of the 70 ppt standard. On January 10, 2018, the day that the standard took effect, the state filed a lawsuit against Wolverine World Wide seeking to recover costs incurred by the state in its investigation of PFAS contamination of drinking water.¹⁰⁵

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Copyright © 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.