June 01, 2017

This Old (Pre–1978) House: Lead-Based Paint Regulation and Enforcement under TSCA

John Jacus and Dean Miller

Although the United States Environmental Protection Agency’s (EPA’s) Renovation, Repair and Painting (RRP) Rule, 40 C.F.R. Part 745—requiring renovators to follow lead-safe work practices when their renovation work disturbs lead-based paint (LBP)—was adopted in 2008 and became fully effective in 2010, it was not until the last several years that EPA has made a particularly strong push to enforce it. With last year’s consent decree with Sears Home Improvement Products and more than 120 other enforcement actions against renovation contractors large and small to its credit, EPA appears to be signaling very loudly that, after eight years since the rule’s promulgation, renovators’ compliance with the RRP Rule is not optional, and enforcement is a very high priority.

This heightened federal enforcement trend is fueled in part by the heightened concerns about lead toxicity after the Flint, Michigan, public drinking water crisis made national news in 2015 and 2016. Although the Flint scandal increased awareness of lead in drinking water, LBP is the primary route of human exposure to lead in the United States, a fact that has long been recognized by Congress (which enacted largely ineffectual legislation in the early 1970s aimed at abatement and LBP hazard reduction in federally owned, assisted, and insured housing). This article summarizes the requirements of federal law and most state programs governing renovation activities that are likely to disturb LBP, primarily the RRP Rule and its state counterparts, and then looks more closely at recent EPA enforcement actions and guidance for insights into future RRP Rule enforcement.

Although the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601–2629, has been around since 1976 and the Consumer Product Safety Commission banned lead-based paints from residential use in 1978, it was not until 2008 that EPA issued the RRP Rule specifically to address LBP hazards through required work practices for renovation activities in so-called “target housing” (residential structures built before 1978) and “child-occupied facilities.” This was accomplished after years of study by a task force established by EPA and HUD under the Clinton and George W. Bush administrations, which led to passage of legislation amending TSCA and the adoption of rules over time requiring lead disclosure, certification, and training for lead abatement and lead-safe work practices.

Lead exposure has long been known to be linked to a host of adverse health effects, and the risk of permanent harm from lead exposure is the greatest for children. The adverse effects of lead toxicity during childhood include a variety of sensory, motor, cognitive, and behavioral impacts. Children six years old and under are most at risk from exposure to LBP because they crawl on the floor and put their hands and other small items that can have LBP dust on them into their mouths. Because their bodies are still growing, these children also tend to absorb more lead than adults. There is no known safe blood lead level.

The American Healthy Homes Survey (AHHS) conducted in 2005–2006 estimated that 37.1 million homes in the United States (35 percent of 106 million housing units at that time) had LBP somewhere in them. See U.S. Dep’t of Hous. and Urban Dev., Office of Healthy Homes and Lead Hazard Control, American Healthy Homes Survey: Lead and Arsenic Findings (April 2011), available at https://portal.hud.gov/hudportal/documents/huddoc?id=AHHS_Report.pdf. Not surprisingly, the incidence of LBP hazards increases with the age of housing, and the AHHS estimated that 86 percent of homes built before 1940 had LBP. LBP hazards include deteriorated LBP in greater than de minimis amounts, elevated dust lead levels in housing (on floors and window sills), and elevated soil lead levels outside homes. Health risks associated with LBP exposure increase dramatically when lead paint deteriorates and is disturbed during renovation activities, unless lead-safe work practices are followed.

While the percentage of homes that now present LBP hazards likely has dropped somewhat in the 10 years since the AHHS, there still is a significant percentage of U.S. housing stock that poses these LBP exposure risks. For example, a very recent study by Reuters News Service based on blood lead testing results from across the United States found almost 3,000 areas with lead-poisoning rates resulting primarily from exposure to LBP that were significantly higher than those discovered in Flint, Michigan, last year. M.B. Pell and Joshua Schnever, The thousands of U.S. locales where lead poisoning is worse than Flint, Reuters, Dec. 19, 2016, available at www.reuters.com/investigates/special-report/usa-lead-testing. The Centers for Disease Control also maintains a compilation of state surveillance data on blood lead levels of children under six years old as part of its Childhood Lead Poisoning Prevention Program. The bottom line is that LBP hazards widely persist, require adherence to existing compliance requirements and safe work practices to mitigate their potential harm, and will for many years to come.

The RRP Rule is broadly applicable, with very narrow exceptions. Under the authority of TSCA Section 402(c)(3), 15 U.S.C. §§ 2604(c)(3), EPA issued its final RRP Rule to address LBP hazards created by renovation, repair, and painting activities that disturb LBP in target housing and child-occupied facilities. This was the third in a series of three rules aimed at reducing LBP risks in the United States. The first two rules required disclosure of LBP hazards to renters and purchasers of “target housing” for sale or lease, 61 Fed. Reg. 9064 (March 6, 1996) (the Lead Disclosure Rule), and LBP abatement requirements for training and certification of abatement contractors and their use of safe work practice standards, 61 Fed. Reg. 45,778 (Aug. 29, 1996) (the Abatement Rule).

More specifically, EPA promulgated the RRP Rule to ensure that individuals conducting renovation activities (as opposed to abatement activities) in target housing and child-occupied facilities are properly trained and certified, that RRP training programs are accredited, and that renovation activities that disturb LBP are conducted according to effective and safe work practice standards. ‘‘Target housing’’ is defined in TSCA Section 401 as any housing constructed before 1978, except housing for the elderly or persons with disabilities (unless any child under age six resides or is expected to reside in such housing) or any zero-bedroom dwelling. A “child-occupied facility” is a building, or a portion of a building that is constructed before 1978, visited regularly by the same child under six years of age for specifically identified time periods, and may include commercial buildings. The RRP Rule applies nationwide unless a state or tribe has developed its own equivalent or more stringent program, approved by EPA.

Required lead-safe work practices under the RRP Rule include occupant protection through containment of the work area by using plastic sheeting over doors, windows, floors, and the ground surface for exterior renovations and dust-control measures, among other things. Renovators also must post warning signs and follow specific cleanup requirements at the completion of the work. The RRP Rule also prohibits certain work practices that present a heightened risk of exposure, such as open-flame burning or torching of LBP, and the removal of LBP through high-speed abrasion such as power sanding and grinding without the use of high-efficiency particulate air vacuums to collect the lead dust generated.

Documentation Requirements

Another important aspect of the RRP Rule that has been a focus of both EPA and state enforcement is the RRP Rule’s documentation requirements. The RRP Rule requires reports certifying a determination that LBP was not present, and if it was present, records of an inspector or risk assessor showing that testing was done with an EPA-recognized test kit or laboratory paint-chip testing. Also required is proof of delivery to, or acknowledgment of receipt by, building owners or occupants of EPA and HUD’s “Renovate Right” pamphlet. The acknowledgment of receipt must be signed by the homeowner prior to, but no more than 60 days before, commencement of work. For multi-family housing, the RRP Rule requires signed, dated statements regarding notifications to occupants of work in common areas. Renovators also must document compliance with the required work practice standards. These records must be kept for a minimum of three years after the renovation is completed.

The RRP Rule is broadly applicable—there are no categorical exemptions for any specific trades or types of renovation activities; however, there is an important exception for homeowners doing their own renovation work where there is no fee for service and no third-party renter in the home. This do-it-yourself or “DIY” exception apparently was created to avoid bringing the full force of government regulation and sanctions down upon the average homeowner that performs his or her own maintenance, repair, and renovation activities. The DIY exception does put a premium on education and outreach to alert homeowners to the hazards of LBP disturbance and the work practices that should be followed to mitigate such hazards in their personal renovation work.

Another exception from broad applicability of the RRP Rule is the “minor repair and maintenance” exception, which is widely claimed, often misunderstood, and easily compromised by poor or nonexistent documentation. This exception establishes thresholds of disturbed painted surface area below which the RRP Rule does not apply. The threshold for interior work is disturbance of more than six square feet per room, and for exterior work the threshold is greater than 20 square feet of all disturbed exterior surfaces. Importantly, EPA’s prescribed means of calculating such disturbed areas is very conservative. For example, the “area disturbed” is not just the cut line for renovation work going through painted drywall. Rather, it is the entire painted surface removed, including painted components. Thus, cutting an opening in a wall larger than 2' x 3' that has LBP on it will exceed the interior threshold for “minor repair.”

Other important qualifying factors exist that must be met to claim the minor repair exception, and these often are not well understood or properly documented. First, in addition to remaining below the noted thresholds, none of the work practices engaged in for the “minor repair” may include prohibited or restricted work practices, such as dry scraping to remove LBP. Also, even if below the noted thresholds and not involving prohibited work practices, the minor repair activities may not involve any window replacement or demolition of painted surface areas.

Because there are no categorical exemptions for certain types of renovation activity, e.g., replacement of gutters or siding, the need for renovators to create and maintain documentation of their compliance with the RRP Rule has a very broad reach. For example, one might assume that roofers would not trigger RRP Rule requirements. However, if they remove painted flashing, repair or repaint soffit and fascia damaged by water, or repaint roof vents, they could exceed the 20-square-feet applicability threshold for exterior renovation activities above which their LBP disturbance is no longer “minor.”

Local RRP Requirements

It is important to remember that states and tribes may have their own, more-stringent RRP programs. For example, California has its own robust RRP program, which applies even more broadly than the federal rule to cover any quantity of LBP in any “public” and “residential” buildings, not just target housing and child-occupied facilities. Cal. Code Regs. tit. 17, §§ 35001–36100. In addition, California, Kansas, and Rhode Island do not permit the use of commercial lead test kits, and renovators may not conduct testing of painted surfaces without additional training and certification, if at all. EPA maintains a listing of states and tribes with authorized RRP programs to more readily identify and comply with their different and possibly more stringent requirements. See U.S. Envtl. Prot. Agency, Lead-Based Paint Activities Professionals (last updated May 8, 2017), www.epa.gov/lead/lead-based-paint-activities-professionals. As of the date of publication, 14 states and one tribe have their own EPA-approved RRP programs: Alabama, Delaware, Georgia, Iowa, Kansas, Massachusetts, Mississippi, North Carolina, Oklahoma, Oregon, Rhode Island, Utah, Washington, Wisconsin, and the Bois Forte Band. U.S. Envtl. Prot. Agency, Locate Certified Renovation and Lead Dust Sampling Technician Firms (Feb. 10, 2017), https://cfpub.epa.gov/flpp/pub/index.cfm?do=main.firmSearch.

The scope of liability under the RRP Rule, including the broad terms and narrow exceptions discussed above, is broad for a number of reasons. Perhaps none of the RRP Rule’s terms is as indicative of the breadth of its reach as the key term “renovator.” This term applies not only to those directly conducting renovation activities, but also to their general contractors because “renovator” is defined to include both individuals who perform renovation work and those who direct workers who perform renovations. As a result, regulators frequently consider a subcontractor’s violation of almost any RRP requirement to be a violation by the general contractor. This also places a premium on recordkeeping by the general contractor, who may be tempted to rely on the subcontractor to prepare and keep necessary documentation of RRP Rule compliance.

Civil penalties for RRP Rule violations under TSCA can be significant. Even for simply failing to maintain required documents, penalties can be up to $37,500 per violation per day. 15 U.S.C. § 2615(a)(1). As with most other environmental statutes and associated penalty policies, repeat violations can result in escalating penalties. There also are potential criminal penalties under TSCA for “knowing violations,” with penalties of up to $50,000 per violation per day, or imprisonment for not more than one year, or both, in addition to or in lieu of civil penalties. Id. at § 2615(b)(1). “Knowing endangerment” under TSCA carries penalties of up to 15 years imprisonment or a fine of not more than $250,000, or both, and an organization convicted of knowing endangerment may be subject to a fine of not more than $1,000,000. Id. at § 2615(b)(2)(a).

TSCA is one of the earliest federal environmental statutes, and although reauthorized and amended over the years, including quite recently, it does not contain an information-gathering provision comparable to the Comprehensive Environmental Response, Compensation, and Liability Act § 104(e), 42 U.S.C. § 9604(e); Clean Air Act § 114(a), 42 U.S.C. § 7414(a); or Clean Water Act § 308, 33 U.S.C. § 1318. As a consequence, information request letters EPA sends under TSCA should, and frequently do, indicate that compliance with the request is voluntary. That said, EPA does possess records inspection authority and civil subpoena authority under TSCA. 15 U.S.C. § 2610(c).

Enforcement Activity

It appears that EPA has undertaken more frequent and more significant enforcement of late to ensure compliance with the RRP Rule. For example, in 2016, EPA took 123 enforcement actions for violations of the LBP rules. Of these, 116 cited RRP Rule violations, with 63 percent alleging failure to obtain or maintain EPA lead certification (the non-RRP Rule actions concerned Lead Disclosure Rule violations). Almost half of these RRP Rule enforcement actions involved failure to follow lead-safe work practices. Many of the alleged violations were for failure to keep or create required records. EPA issued a press release in November 2016 that summarized these enforcement actions taken in the prior 12 months. News Release, U.S. Envtl. Prot. Agency, EPA Enforcement Actions Help Protect Vulnerable Communities from Lead-Based Paint Health Hazards (Nov. 2, 2016), available at www.epa.gov/newsreleases/epa-enforcement-actions-help-protect-vulnerable-communities-lead-based-paint-health. The most significant enforcement action EPA reported in that press release was the consent decree with Sears Home Improvement Products, filed in August of 2016, which EPA and DOJ separately announced with some fanfare when it was lodged in federal court. That consent decree was patterned after another similar decree entered by EPA and Lowes Home Improvement in 2014. The Lowes and Sears TSCA consent decrees contain many provisions that reveal EPA’s current approach to RRP Rule enforcement. They also are similar in many respects to recent consent decrees under other major federal statutes, such as the Clean Air Act.

The most obvious similarities between the Lowes and Sears consent decrees are the scope of alleged violations and the penalty amounts. The Lowes consent decree required payment of a $500,000 civil penalty, and the Sears consent decree required payment of $400,000. Also, the complaint in each case alleged violations in multiple states and EPA regions. In the Lowes case, EPA discovered violations through its review of records from renovation services performed by Lowes contractors in nine states (Alaska, Connecticut, Idaho, Illinois, New Hampshire, New York, Ohio, Tennessee, and Vermont) and five different EPA regions. In the Sears complaint, EPA alleged a failure to provide required documentation of RRP Rule compliance for 71 renovations performed in six states (California, Georgia, Minnesota, Nevada, New York, and Wisconsin) and five EPA regions. This indicates a broader inquiry than in just one geographic area, and it led to a company-wide set of obligations imposed by the terms of those decrees, which are summarized below.

Another similarity between the Lowes and Sears consent decrees is what EPA and DOJ have been doing in such settlements more aggressively across a number of major environmental enforcement programs—namely, obtaining a wide array of injunctive relief provisions that go well beyond the existing requirements of law and regulation, and obtaining concessions that comport with their “Next Generation Compliance Strategy” (NextGen Strategy) developed in 2014. While the Lowes consent decree actually pre-dated the NextGen Strategy by about six months, it does require links to EPA webpages on the Lowes public internet site, similar to more aggressive requirements to post compliance data gathered under a consent decree on a settling company’s public website. It also required Lowes to reconfigure its computerized sales tool(s) to “include a prompt . . . that instructs sales associates to inform Defendant’s customers of” the existence and availability of an installer-completed renovation recordkeeping checklist that also is available from Lowes. Additionally, Lowes was required to include an alert on its Installer intranet portal notifying certified firms and certified renovators of new EPA guidance or RRP Rule changes, or guidance on consent decree implementation issues.

Other aspects of the Lowes consent decree also are notable, even if not a direct product of the thinking and policy expressed in the NextGen Strategy. These include Lowes’ obligation to designate an employee as a compliance manager under the consent decree. Also, Lowes can use only certified firms and renovators for any work in target housing and child-occupied facilities, which goes beyond the requirements of existing law in most states, where paint testing may indicate no LBP hazard is present. The settlement also requires Lowes to suspend certified firms following a determination of their noncompliance with the RRP Rule; and with respect to any customer complaints regarding a deviation from RRP Rule requirements, Lowes must send a certified firm to the affected home or structure to confirm that the area has been cleaned in compliance with EPA requirements at 40 C.F.R. § 745.85(b). Finally, the settlement requires extensive periodic reporting to EPA on adherence to and implementation of the decree’s requirements.

The Sears consent decree executed just two years later reveals similar, if not identical, requirements, even though the NextGen Strategy and directive of former Assistant Administrator Cynthia Giles to Use NextGen Compliance Tools in Civil Enforcement Settlements (Jan. 17, 2015), had been issued in the interim. The aspects of the NextGen Strategy that are again most apparent in the Sears consent decree concern the reconfiguration of Sears’ computerized sales tool(s) to prompt sales associates to inform customers of the existence and availability of the Renovation Recordkeeping Checklist required under the consent decree, as well as website links to additional EPA information on LBP hazards, guidance, and regulations, both for customers and for installers.

Perhaps most importantly, the complaints and the EPA and Department of Justice (DOJ) press statements regarding both of these decrees focus heavily on the inability of Lowes and Sears to provide documentation that their contractors had been EPA-certified, had been properly trained, had used lead-safe work practices, or had correctly used EPA-approved lead test kits at renovation sites to determine RRP Rule applicability. Once again, it is the documentation of compliance (or lack thereof) that was a key factor in EPA and DOJ pursuing these cases. Inasmuch as this lack of documentation appeared to be systemic, and not isolated occurrences, the consent decree’s requirements were crafted to apply company-wide, to some 1,700 stores in the case of Lowes (as of 2014).

Although the Lowes and Sears consent decrees are notable products of individual enforcement actions, EPA clearly has been more active in its TSCA enforcement of RRP Rule and related LBP rules in recent years. For example, in December of 2014, EPA touted the 61 RRP Rule enforcement actions it had taken that year, one of which was the Lowes case. In November of 2016, EPA announced it had taken 123 enforcement actions in the prior 12 months regarding RRP Rule and related Lead Disclosure Rule violations by general contractors, installers, and property managers, one of which was the Sears case. Clearly, the pace and scope of RRP Rule enforcement has increased over that two-and-one-half-year period from April 2014 to November 2016.

Perhaps the most important thing a company can do to ensure compliance with the RRP Rule and any other environmental programs is to establish and maintain a culture of compliance. Of course, establishing such a culture requires strong support from top management. As was the case for so many years with the quality management function generally, environmental performance and compliance can’t take a back seat to production and sales. Not only are the potential monetary and criminal penalties of noncompliance a deterrent, but protecting workers and the public from the hazards of LBP is an essential part of engaging in the renovation business. In addition, the stigma of repeated violations can result in reputational harm and a corresponding loss of business volume.

Companies of all sizes that are subject to the RRP Rule should establish robust compliance programs that include training, systematic document creation and retention procedures, and a system to ensure subcontractor compliance through contracting provisions and a meaningful quality control and compliance auditing program. This is particularly important for general contractors and any renovator that subcontracts the work involving disturbance of LBP. In addition, companies should consider requiring photographs to document compliance with lead-safe work practices throughout a renovation project, in addition to currently required forms in their jurisdiction(s).

RRP Rule compliance is particularly document-intensive. Companies that retain subcontractors to perform renovation work should include provisions in their subcontractor agreements that require compliance with all RRP Rule requirements, which may include confirmation that the subcontractor has generated all required documentation before the subcontractor is paid for a specific project. Renovation companies should establish a document management system that maintains RRP-training certification documents, documents concerning when and how it was determined whether a pre-1978 structure does or does not have LBP, as well as the other documents required by the RRP Rule, including acknowledgments that the owner of the property being renovated received the “Renovate Right” pamphlet within the required timeframe.

While EPA and states have ramped up enforcement of the RRP Rule in recent years, it is not clear how the Trump administration’s enforcement priorities may affect RRP Rule enforcement. Nevertheless, given the significant risk presented by LBP, and the growing public awareness of LBP hazards, any company engaged in renovation activities should consider redoubling their compliance and documentation efforts and possibly performing an audit of their past compliance. An environmental audit of RRP compliance, if properly performed and if potential violations are promptly disclosed, is an important tool for mitigating the exposure of a renovator to penalties for past noncompliance, while also strengthening its RRP Rule compliance procedures moving forward. The requirements for and potential benefits of environmental auditing is beyond the scope of this article, but that remains a useful option for renovation services companies that are unsure of their compliance and concerned about possible future inspections and enforcement by EPA and state regulators. Moreover, conducting an audit and bringing potential noncompliance to EPA’s or a state regulator’s attention on one’s own will invariably result in lesser sanctions than if one waits for the regulator to knock on the door seeking to inspect for compliance. The only sure thing in all of this is that eventually the regulator will come a-knocking.

John Jacus and Dean Miller

Mr. Jacus, a partner with Davis Graham & Stubbs LLP, Denver, Colorado, heads the firm’s Environmental Practice Group. He may be reached at john.jacus@dgslaw.com. Mr. Miller is of counsel in the same firm and office, where he is a member of the firm’s Environmental Practice Group. He may be reached at dean.miller@dgslaw.com.