Developments in Recent NY Medical Monitoring Claims

Posted in Litigation, New York, Water

As readers of this blog know, we have been closely following developments regarding claims for medical monitoring.  (Medical Monitoring Claims in Illinois, Part 1; Medical Monitoring Claims in Illinois, Part 2.) A recent decision arising out of Hoosick Falls, New York, allowed Plaintiffs’ request for a medical monitoring fund to survive defendants’ motion to dismiss. On Feb. 24, 2016, Plaintiffs, on behalf of a putative class, brought suit against Saint-Gobain Performance Plastics Corp. and Honeywell International Inc., alleging that Defendants’ manufacturing facilities in the Village of Hoosick Falls, New York, caused groundwater contamination. Specifically, Plaintiffs alleged that Defendants’ manufacturing and disposal of products containing perfluorooctanoic acid (PFOA) caused PFOA to contaminate the municipal water system and private wells. PFOA is a chemical used to create water, oil, and grease repellency which can remain in soil and water for extended periods of time. Plaintiffs alleged that they experienced heightened blood levels of PFOA, which may cause cancer, as well as loss of property value due to the stigma of contaminated groundwater. The complaint asserted claims for negligence, private nuisance, trespass, and strict liability for abnormally dangerous activity. The complaint set forth two subclasses of plaintiffs based on their water source: (1) Municipal Water Property Damage – owners of real property in the village who receive drinking water from the municipal water supply; and (2) Private Well Water Property Damage – owners of real property in the village who receive drinking water from a privately-owned well.

Defendants brought a motion to dismiss for failure to state a claim.  Significantly, Plaintiffs sought to establish a medical monitoring program designed to fund future testing and treatment for diseases related to PFOA exposure. Defendants argued that Plaintiffs asserted a separate medical monitoring claim without alleging the existence of present physical injuries, a requisite under New York law. The Court disagreed, finding that Plaintiffs properly alleged an injury to both person and property. In particular, the Court adopted the reasoning of the Second Circuit in In re World Trade Ctr. Lower Manhattan Disaster Site Litig., holding that the heightened accumulation of PFOA in Plaintiffs’ blood levels permits a claim for negligence seeking medical monitoring damages. See 758 F. 3d 202, 213 (2nd Cir. 2014). Even if the accumulation of toxins in blood were not a sufficient injury, the Court relied on Caronia v. Philip Morris USA, Inc. to find that plaintiffs may seek medical monitoring as consequential damages for a tort alleging injury to property. 2011 WL 338425 (E.D.N.Y. Jan. 13, 2011) aff’d in part, question certified, 715 F.3d 417 (2d Cir. 2013), certified question accepted, 21 N.Y.3d 937 (2013), and certified question answered, 22 N.Y.3d 439 (2013), and aff’d, 748 F.3d 454 (2d Cir. 2014). However, the Court cautioned that the decision did not determine what Plaintiffs must prove at trial to recover consequential medical monitoring damages. Noting that the Defendants’ motion to dismiss raised “several complex and novel issues of New York law” which is “significantly muddled,” the Court certified the question for interlocutory appeal.  We will continue to follow this appeal closely.

Defendants also argued that the property damage claims based on injury to groundwater must be dismissed because the water is a public resource belonging to the state of New York, not individual residents. The Court agreed that Plaintiffs could not state a claim for relief if the only alleged injury was to the public groundwater; however, the Court found that Plaintiffs’ claims for negligence and strict liability based on property damage survived because they alleged the loss of their potable water, reduction in property value, and sought damages for remediation costs for property contamination and restoring their potable water supply.  Defendants moved to dismiss the trespass claim brought by the Private Well Plaintiffs on the basis that the Plaintiffs’ property was not injured by PFOA contamination. The Court rejected this argument, finding that the groundwater provided the medium through which the contamination moved into Plaintiffs’ private wells, thus injuring Plaintiffs’ private property. Defendants also moved to dismiss the private nuisance claim for failure to state a claim. Defendants argued that a private nuisance claim must affect only a small number of people, but Plaintiffs alleged a widespread injury. The Court agreed in part and dismissed the Municipal Water Plaintiffs’ nuisance claim, finding that the allegations of  harm suffered by “all renters and owners in Hoosick Falls” constituted a public nuisance, which only the state of its subdivision have standing to bring; however, the Private Well Plaintiffs suffered a “special loss” sufficient to maintain a private nuisance action where they had to install point of entry treatment systems on their property which requires ongoing maintenance. Because of this, the Court allowed the Private Well Plaintiffs’ nuisance claim to proceed.

New Delegation Centralizes Largest Superfund Cleanup Decisions

Posted in EPA, GT Alert, Superfunds

In a move designed to streamline approvals of and ensure consistency among the largest Superfund cleanups, EPA Administrator Scott Pruitt last week approved a new delegation of authority giving him and his yet-to-be-named deputy the final signature authority to approve large Superfund cleanups over $50 million. Prior to the revision, approval authority rested with EPA’s 10 regional administrators and the assistant administrator of the Office of Land and Emergency Management.

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Overview of Coal Ash Disposal, Regulation and Beneficial Use

Posted in Articles, Coal, Energy, Pennsylvania, Regulatory

According to the U.S. Energy Information Administration, the commonwealth of Pennsylvania is the largest generator of coal ash in the United States. Pennsylvania is home to roughly 100 coal ash disposal facilities, three of which have been classified as “high hazard” by the U.S. Environmental Protection Agency (EPA). Throughout the country, numerous electric generating facilities have been retiring coal-fired units in favor of natural gas combined cycle units. Still, many of those same electric generating plants find themselves undertaking large-scale coal ash mobilization projects resulting from decades of coal ash accumulation and catalyzed by new regulations from the EPA. With litigation both arising from, and in opposition to, the coal ash regulations, it is an area worth watching at the state and federal levels.

Read more from my article in The Legal Intelligencer supplement, PA Law Weekly by clicking here.

Perfluorinated Chemicals – Drinking Water & Fast Food Packaging

Posted in Chemicals, Water

Manufacturers, users, and distributors of PFOS and PFOA have faced litigation across the United States by plaintiffs alleging contamination of drinking water.  The claims range from personal injury to diminution of property value.  A recent study of PFAS in fast food packaging suggests possible health concerns associated with using certain PFASs in fast food packaging.  Frank Citera and Kaitlyn Maxwell provide an overview of perfluorinated chemicals in drinking water and fast food packaging here. To access their CLE webinar on this topic please visit Lawline.

Product Stewardship and Textiles

Posted in Chemicals, EPA, Proposition 65

The environmental parameters associated with textiles continue to attract both regulatory and value chain attention. In an interesting development, Vietnam just relaxed its chemical testing rules for exported textiles (e.g., textiles and apparel exported to the U.S. and EU markets), specifically for formaldehyde and aromatic amines. Formaldehyde is frequently used in treating textiles, including popular “no-iron” and “permanent press” textiles.  Aromatic amines are present in some common dyes used in textiles and include chemicals that are either known or suspected to be carcinogens.

The presence of these chemicals in textiles is relatively unregulated at the federal level in the United States, though there has been some attention at the state level. For example, formaldehyde is subject to California’s Proposition 65, and some crafts/textile stores in California post Proposition 65 warnings for their imported textiles. Washington, Maine, and Minnesota have statutes with reporting requirements for what are typically described as “high priority” chemicals, including formaldehyde, intentionally added to children’s products (though not all of these encompass apparel). There has been occasional litigation based on claims of skin irritation allegedly caused by the presence of formaldehyde in apparel.

Perhaps more importantly than formal regulation, the chemical content of apparel, including formaldehyde, receives a certain amount of attention in social media. This reverberates into market impacts, with some companies trying to leverage this into a competitive advantage by advertising “chemical-free” clothing. This leverage could increase if major buyers begin to drive chemical content requirements through their value chains. Some of the most prominent retailers, including Walmart,  have already launched initiatives to decrease or remove certain chemicals, including formaldehyde, from a range of products, including personal care, cosmetics and cleaning products. Some major buyers and brands, including Walmart, Levi Strauss, and VF have signed on to policies and standards associated with sustainable forestry and agriculture that affect the value chain for a variety of raw materials for textiles, including rayon and cotton.

Decisions by Vietnam to impose more stringent chemical content standards for apparel on its own market than it does for its strong apparel export market might increase public and retailer attention to this issue. The most likely ongoing pressure points will probably be from social media, consumers, and companies seeking to leverage this issue for competitive advantage. And even if increased federal regulation is viewed by some as less likely under the current administration, that will not restrict state regulators from taking action (the preemption provisions of the newly amended Toxic Substances Control Act  will operate, roughly speaking, in inverse proportion to the degree of EPA regulation of specific chemicals: the less active EPA is, the more freedom of movement at the state level).

EPA Solicits Comments on Regulatory Reform

Posted in Energy, Environment, EPA, GT Alert, Regulatory

On April 13, the U.S. Environmental Protection Agency (EPA) published a request for comments to aid EPA’s ongoing “Evaluation of Existing Regulations,” which seeks to identify regulations that may be appropriate for repeal, replacement, or modification. Comments must be submitted by May 15, so parties interested in taking this opportunity to help EPA identify regulations that are burdensome or otherwise undesirable need to act quickly.

This notice follows President Trump’s Feb. 24 Executive Order on Enforcing the Regulatory Reform Agenda, E.O. 13777, which outlined the new administration’s goal of alleviating unnecessary regulatory burdens. Pursuant to E.O. 13777, each federal agency must designate a Regulatory Reform Officer and establish a Regulatory Reform Task Force. EPA has already established both.

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Good News for States and Surface Coal Mine Operators in Recent Department of Interior Announcement

Posted in Coal, Mining

On April 13, the Acting Director of the U.S. Department of Interior, Office of Surface Mining Reclamation and Enforcement (OSMRE) announced that OSMRE will be reinitiating formal programmatic consultation with the U.S. Fish & Wildlife Service, pursuant to Section 7(a)(2) of the Endangered Species Act (ESA) and 50 CFR § 402.16, with respect to OSMRE’s implementation of Title V of the Surface Mining Control and Reclamation Act ( SMCRA). Today’s action is an acknowledgment that the recent disapproval and nullification of OSMRE’s Stream Protection Rule (SPR) by recent operation of the Congressional Review Act also in turn, nullified both the Dec. 16, 2016, Programmatic Biological Opinion and Conference Opinion on the Office of Surface Mining Reclamation and Enforcement’s Regulatory Program as Modified by the Issuance and Implementation of the Final Regulation (2016 BiOp).

Given that it would have been unlawful for OSMRE to have allowed the 2016 BiOp to continue in place, OSMRE today withdrew the 2016 BiOp and advised States that they may continue to rely on the 1996 Biological Opinion and Conference Report (1996 BiOp) and the 1996 Incidental Take Statement (ITS) for the exemption of take. In addition, while the reinitiated consultation is underway, OSMRE has developed interim guidance for the state regulatory authorities to ensure that all appropriate regulations, the requirements from the 1996 BiOp, and the Terms and Conditions listed in the Incidental Take Statement associated with the 1996 BiOp are followed.

This is good news for the major western and midwestern coal-producing states and mine operators, as the 2016 BiOp explicitly superseded and replaced the previous Biological Opinion issued in 1996 that imposed significantly less onerous conditions on SMRCA permits and other actions relating to ESA compliance.

A GT Shareholder represents the State of North Dakota in its federal court challenge in to the OSMRE’s Stream Protection Rule. While that Rule was invalidated recently under the Congressional Review Act, a related action by the U.S. Fish & Wildlife Service would have effectively allowed the SPR to live on and greatly impair surface coal mining in states across the country. Today, DOI took steps to stop that result.

In a Historic Decision to Ban All Metals Mining, El Salvador Appears to Have Closed the Door on OceanaGold

Posted in Mining

On March 29, 2017, legislators in El Salvador passed a much-anticipated bill prohibiting all mining for gold and other metals. The results of the vote were unanimous and cross-party: 69 in favor, none against, and no abstentions. The bill makes El Salvador the first country in the world to institute such a blanket ban on metals mining.

The bill is succinct but comprehensive. With the exception of a transition period for small scale gold mining artisans, the law decrees an immediate, permanent ban on all exploration, extraction, and processing of metals, whether underground or above-ground. The prohibition includes exploration, extraction, or processing ore with techniques that involve cyanide of mercury – commonly used techniques in Central and South America. No license applications or old permits will be grandfathered in under the bill, which is scheduled to take effect one week after its publication in the official governmental gazette.

This new legislation comes at the heels of a lengthy investor state dispute settlement (ISDS) case between OceanaGold and the Salvadoran government. As detailed in my November 2014 blog post, Environmental Regulation and Investor State Dispute Settlement Clauses – OceanaGold and El Salvador, Pacific Rim – since acquired by the Australian-Canadian mining firm OceanaGold — filed a complaint in 2009 against El Salvador under the ISDS clause of the Dominican Republic-Central American Free Trade Agreement (CAFTA). Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12). Pacific Rim, a Canadian company, originally discovered a gold mine site (El Dorado) along the Lempa River in 2002. In its complaint, Pacific Rim alleged that the investor-friendly former Salvadoran government encouraged it to spend “tens of millions of dollars to undertake mineral exploration activities” only to then institute a moratorium and withhold necessary permits once valuable deposits were discovered. Salvadoran officials stated that Pacific Rim failed to get government approval for its Environmental Impact Study, did not submit a required feasibility study, and did not meet land title and permission-to-mine requirements.

In 2012, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) found that Pacific Rim, as a Canadian company, could not invoke CAFTA. The company changed its claim, accusing El Salvador instead of violating its own investment law. From Sept. 15-22, 2014, ICSID held a hearing regarding whether El Salvador was required to issue a gold mining license to OceanaGold. OceanaGold sought either a green light for the El Dorado mine project or approximately US$300 million in compensation from the Salvadoran government. In October 2016, ICSID found in favor of El Salvador and ordered OceanaGold to pay the country US$8 million in legal costs. In March 2017, ICSID ordered OceanaGold to pay the US$8 million immediately or face the addition of 2-5 percent monthly interest.

El Salvador has since modified its investment law in an attempt to prevent disputes like the long-running OceanaGold case. Last week’s mining legislation may achieve multiple goals including increasing environmental protection, tying up loose ends in the OceanaGold case, and making a decisive statement regarding the country’s mining moratorium. This legislative development seems likely to end any hopes OceanaGold had of being able to develop or sell its El Dorado project.

EPA Takes Steps to Regulate Use and Disposal of Mercury

Posted in Chemicals, EPA, Mercury

On Wednesday, March 29, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register making available the first national Mercury Inventory. 82 Fed. Reg. 15522 (March 29, 2017). The Mercury Inventory is part of a multi-faceted effort by Congress and EPA to regulate use and disposal of mercury, and to ban exports of mercury from the United States.

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The 5th Circuit Issues Order Leaving Intact its Judicial Stay on the EPA Regional Haze Rule

Posted in Air, EPA, Oklahoma, Texas

On March 22, 2017, the U.S. Court of Appeals for the 5th Circuit continued its stay of EPA’s Regional Haze Rule. Texas et al. v. U.S. Environmental Protection Agency, No. 16-60118 (Mar. 22, 2017). The EPA rule would have required power plants in Texas and Oklahoma to install costly and potentially unnecessary upgrades to their generators. Last July, the 5th Circuit granted Texas’ stay motion while rejecting the EPA’s motion to dismiss or transfer, explaining that the plan was likely unlawful, and the costs of compliance with the rule would increase rates for Texas consumers as well as endanger grid reliability if power plants were forced to close. In entering the new order, the court agreed that Texas and Oklahoma had demonstrated a substantial likelihood that the EPA had exceeded its statutory authority when it disapproved the Texas and Oklahoma implementation plans and imposed a federal implementation plan. The court did reject the petitioners’ effort to have the entire rule vacated, and instead granted EPA’s request to remand the rule for reconsideration at the administrative level. This order is not a final decision on the merits, however, and merely maintains the stay in effect.