Waste and Resource Recovery Committee Report

 Inflation Reduction Act

On August 16, 2022, President Joe Biden signed into law the Inflation Reduction Act (the Act). Though there are other features of the Act, the Act emphasizes combating climate change by allocating about $369 billion to clean energy projects, environmental initiatives, and various tax incentives.

A. Qualified Advanced Energy Project Credits Incentivize Recycling of Renewable Energy Components

An important aspect of the Act is the expansion of the definition of a qualified advanced energy project. This definition deals with the types of facilities that qualify for clean energy tax credits based on the amount invested in renewable energy components. The Act expanded the American Recovery and Reinvestment Act of 2009 to apply to projects that recycle certain clean energy components, rather just applying to projects that manufacture certain clean energy components.

The expansion of the Act to include credits for facilities that recycle clean energy components incentivizes not only recycling of those components but could lead to continued investment in and emphasis on reducing waste at the outset. The Act will likely have a positive effect on reducing clean energy component waste and will encourage qualifying facilities to invest in technology that decreases the cost of recycling and makes recycling of clean components less expensive and more widely available.

Coal Combustion Residuals (CCR)

A. Overview of CCRs and CCR Part A Final Rule

Fossil fuel power plants that burn coal to create energy generate byproducts called coal combustion residuals (CCR), commonly referred to as coal ash. Energy generation from coal increased sharply from the 1950s through its height in 2007. As a result, CCRs have been produced in large quantities for decades. In 2021, twenty-two percent of the nation’s electricity was generated from coal resulting in the production of 77.3 million tons of coal ash that year alone. CCRs can be beneficially reused in products like concrete and concrete products. CCRs that are not reused are disposed of by storing in surface impoundments or landfills.

The EPA has evaluated the classification of CCRs extensively since RCRA was enacted in 1976. Ultimately, the EPA has never categorized CCRs as hazardous waste under RCRA. In 2015, the EPA promulgated a Rule under Subtitle D specific to CCRs – the Federal CCR Rule. This regulation establishes minimum national criteria for CCR disposal and management. It governs the design, management, and closure of facilities storing CCRs. The EPA finalized certain revisions to the 2015 regulations as Part A in 2018 and as Part B in 2020. Under RCRA Subtitle D Improvements Act, facilities storing CCR are required to obtain a permit either directly from the EPA or from an EPA-approved state program that mandates compliance with the minimum national criteria, along with conditions imposed by the issuing state agency.

B. EPA Review of Demonstrations for Extension of Deadline for Unlined CCR Surface Impoundments to Stop Receiving Waste

The EPA rules required all unlined coal ash ponds be retrofitted or closed. They also prohibited most of the approximately 500 unlined surface impoundments and certain other ash disposal facilities from receiving waste and were to begin closure by April 2021. New ponds must be lined with an impermeable barrier to prevent leaching. Alternatively, coal ash may be disposed of in an onsite or offsite landfill.

The CCR Part A Final Rule granted facilities the option to submit a demonstration to the EPA for an extension to the deadline for unlined surface impoundments to stop receiving waste. The deadline for facilities to submit these applications for extensions was November 30, 2020.

The EPA received fifty-seven demonstrations and is reviewing them per Title 40 of the Code of Federal Regulations (CFR) sections 257.103(f)(1) and 257.103(f)(2). The EPA began announcing its proposed determinations on these demonstrations in January 2022. It determined fifty-two of the fifty-seven demonstrations were complete, four were incomplete, and one was ineligible for an extension. Thus far, the EPA has proposed determinations for seven facilities, including three proposed denials and four proposed conditional approvals. A public comment period follows each determination proposed by the EPA before it is finalized.

On November 18, 2022, the EPA issued the first final decision denying a facility’s request to continue disposal of CCRs into an unlined pond beyond the deadline to stop such disposal. This application was submitted by Gavin Power, LLC for the General James M. Gavin Power Plant in Cheshire, Ohio. The EPA noted that the facility failed to demonstrate that it is in compliance with CCR regulations. Issues with the facility and its demonstration include an unlined surface impoundment that was closed with waste sitting in groundwater; inadequate groundwater monitoring systems; failure to conduct appropriate statistical analyses of data; and failure to support alternative source demonstrations.

C. EPA Settlement with Public Service Company of Colorado under the CCR Program

The EPA reached a “first-of-its-kind” settlement under its CCR program on May 23, 2022, with Public Service Company of Colorado’s (PSCo’s) Comanche power station in Pueblo, Colorado. The settlement requires the facility to come into compliance with the CCR program and pay a civil penalty of $925,000.

D. Waterkeeper Alliance, Inc. v. Regan

Oklahoma submitted a permitting program for its CCR disposal facilities to the EPA for approval under RCRA Subtitle D Improvements Act. The EPA granted approval of Oklahoma’s plan. Three environmental groups subsequently sued the EPA challenging its approval of Oklahoma’s coal ash disposal program. The groups based their claims challenging the adequacy of Oklahoma’s program on RCRA and the Administrative Procedures Act (APA). The groups contend their injuries are that “the Oklahoma Program denies their members a meaningful opportunity to participate in permitting processes, exposing them to a greater risk of coal-ash pollution and its attendant consequences.” The EPA moved for summary judgement. The District Court granted the EPA’s motion as to most of the claims and the environmental groups appealed.

The U.S. Court of Appeals for the D.C. Circuit sua sponte examined the groups’ standing to bring each of their seven claims. The Court found that the groups lacked standing to bring their citizen suit claims under RCRA because they failed to show that the requested relief (an order requiring the EPA Administrator to promulgate regulations establishing public participation guidelines in state permitting programs) would likely redress their alleged injuries. The relief they requested under the APA related to public participation is vacatur of the EPA’s approval of the Oklahoma Program. As with their RCRA claim, they failed to show that the requested relief would redress their injuries. The groups also challenged the Oklahoma Program’s inclusion of lifetime permits but the Court found they lacked standing to bring these claims because the failed to demonstrate imminent injury. The Court vacated the district court’s order and remanded the case with instructions to dismiss the relevant parts of the complaint for lack of jurisdiction.

Perfluorooctanoic Acids (PFOA)

A. In re E.I. DuPont de Nemours & Co. C-8 Pers. Inj. Litig.

In West Virginia in the early 2000s, a class of individuals sued DuPont over perfluorooctanoic acid (PFOA), also called C-8, contamination in drinking water. This class settled with DuPont in an agreement came to be called the “Leach Agreement.” As a part of the Leach Agreement, class members took part “in a broad epidemiological study into the effects of C-8 on the community . . . .” Before the Parties knew the results of the epidemiology study, they agreed that their future causes of action would be barred unless the study found that a plaintiff’s condition had a “[p]robable [l]ink [to C-8], which meant ‘based upon the weight of the available scientific evidence, it is more likely than not that there is a link between exposure to C-8 and a particular Human Disease among Class Members.’” Additionally, “DuPont agreed not to contest general causation” in future litigation with the class for the diseases with a probable link.

Eventually the study was completed, and the remaining claims were consolidated in a federal MDL. The parties began jury trials, including two bellwether trials and one non-bellwether trial. Plaintiffs won. DuPont appealed but before a decision could be handed down, the Parties settled all the MDL cases.

Plaintiff Travis Abbot filed suit against DuPont after developing cancer from drinking contaminated water. On appeal, DuPont argued that nonmutual offensive collateral estoppel/issue preclusion did not apply. The Sixth Circuit affirmed the district court’s ruling that nonmutual offensive collateral estoppel/issue preclusion applied on three elements of the Ohio negligence claim—duty, breach, and foreseeability.

Under Ohio law, issue preclusion applies “when that issue ‘was actually and directly litigated in the prior action’ and ‘a court of competent jurisdiction’ decided the issue, and ‘the party against whom collateral estoppel is asserted was a party in privity with a party to the prior action.’” According to the Sixth Circuit, these requirements were met because the facts were sufficiently similar to one of the previous trials as that plaintiff drank from the same water district as Plaintiff Abbott. Also, “the jury trials’ decisions on duty, breach, and foreseeability were necessary to each of the verdicts for the earlier Plaintiffs on their negligence claims.” Lastly, the court determined that DuPont had “vigorously contested duty, breach, and foreseeability in all the prior trials.”

The analysis did not stop there. The United States Supreme Court provided additional factors to consider before “apply[ing] offensive nonmutual collateral estoppel against a party.” Courts should consider (1) whether the plaintiff waited for another plaintiff to be successful, (2) whether “the defendant did not have a reason to defend vigorously, particularly if future suits [were] not foreseeable,” (3) whether there are inconsistent judgments, including judgments in the defendant’s favor, and (4) the new lawsuit would provide formerly unavailable “procedural opportunities” to defendant.

The Sixth Circuit ruled that, importantly, DuPont made a bargained for exchange in the Leach Agreement and seemed to regret it. Additionally, the Sixth Circuit looked to the MDL procedure for scheduling trials, DuPont’s influence over the bellwether proceedings, and the previous results. Considering the facts, the factors weighed in favor of collateral estoppel.

B. Personal Jurisdiction Cases

In two cases, DuPont and three other entities in its organizational family challenged personal jurisdiction. Two of these entities were successful in a case in New York; none were successful in North Carolina. The plaintiffs brought claims against Defendants E.I. DU Pont de Nemours and Company (Old DuPont), DuPont de Nemours, Inc. (New DuPont), Corteva, Inc., and The Chemours Company. The plaintiffs alleged that Old DuPont and New DuPont actively restructured themselves to avoid liabilities related to PFAS. The personal jurisdiction issues were about whether New York and North Carolina courts had jurisdiction over the new, restructured entities based on “successor personal jurisdiction.” The courts came out differently.

1. SUEZ Water New York Inc. v. E.I. du Pont de Nemours & Co.

The plaintiff in this case is a corporation operating water systems in New York. Because of elevated levels of PFAS in the water systems, remedying the contamination is and will be costly. It filed claims against Defendants Old DuPont, New DuPont, Corteva, Inc., and The Chemours Company for the costs of these systems on the theory that Defendants sold products that leaked PFAS into the water system. Defendants challenged personal jurisdiction.

The complaint alleged that the "Manufacturing Defendants” (Old DuPont and Chemours) sold and distributed PFAS products and solutions throughout New York. The Court determined that these allegations met the requirements of New York’s long-arm statute and satisfied due process. Plaintiff claimed that the court had successor personal jurisdiction over the other Defendants, but the court disagreed. The court ruled that under New York law, “successor jurisdiction is appropriate only where a predecessor and successor remain one and the same after some corporate-restructuring event (i.e., a merger or its equivalent).” The court did not accept Plaintiff’s argument “that successor jurisdiction attaches when one corporation assumes another’s liabilities.” According to the court, a successor entity may be liable for a predecessor’s conduct after assuming the liabilities, but a plaintiff would have to seek recovery in a jurisdiction that otherwise has personal jurisdiction over the successor.

2. State of North Carolina ex rel. Stein v. E. I. du Pont de Nemours & Co.

The North Carolina Supreme Court came to the opposite conclusion as the New York district court. The issue before the North Carolina Supreme Court was “whether the Due Process Clause allows North Carolina courts to exercise personal jurisdiction over the companies that received those assets, even though they do not have any contacts of their own in this state.” Its answer was yes.

The State of North Carolina alleged that E.I. DuPont de Nemours and Company (Old DuPont) sought to avoid liability by undergoing “a significant corporate reorganization and transfer[ring] millions of dollars in assets to out-of-state companies.” The North Carolina Supreme Court agreed that “authority permits imputation of a predecessor’s actions upon its successor whenever forum law would hold the successor liable for its predecessor’s actions.” This is because the entities, under certain circumstances, are the same entity for the purposes of due process, and “declining to impute contacts for jurisdictional purposes in all cases would enable corporations to avoid all consequences . . . by just reforming in some other jurisdiction[.]”

The Court cautioned against a limited application of successor jurisdiction. A narrow application would create an environment where “[c]ompanies could avoid liability for tortious conduct simply by forming a new, out-of-state company instead of effectuating a merger.” It ruled that some circumstances would permit jurisdiction even if a company only received assets, such as mergers, assumption of liabilities, or reorganizing to avoid liabilities. When a reorganization is done under these circumstances, a predecessor entity’s contacts are imputed to the successor without violating due process. Here, the successor entities assumed the predecessor’s liabilities through contract, and DuPont may be liable.

Hazardous Waste Litigation

A. Residents of Gordon Plaza, Inc. v. Cantrell

Residents of Gordon Plaza filed a citizens suit against the City of New Orleans, alleging that the City failed to take remedial steps to remove the contaminated soil, resulting in health hazards for residents. The court sought to determine whether the City’s maintenance obligations under the EPA Consent Decree constituted removal actions, barring the citizen suit under RCRA. The City argued that removal action included the maintenance of the vegetative cover protecting the soil cap from breach.

RCRA explicitly bars citizen suits against entities that have obtained a court order or consent decree to conduct a removal action. Plaintiffs argued that the City’s maintenance of vegetative covering over the contaminated soil did not amount to a removal action under RCRA. The court sought to determine whether the definition of “removal” included “operation and maintenance” activities. Finding no authoritative interpretation of “removal”, the court looked to the Comprehensive Environmental Response, Compensation and Liability Act’s (CERCLA) definition of removal. Interpreting CERCLA’s definition, it was held that “removal action” is a broad term, to be given a broad interpretation. Removal encompasses the continuing obligations of the City under the Consent Decree to take actions “‘to prevent, minimize, or mitigate damage to the public health or welfare or to the environment.’” Because the City’s maintenance of vegetative coverings over contaminated soil prevented and minimized the hazardous effects of the contaminated soil, such maintenance actions constituted “removal actions.” Thus, Plaintiffs’ citizen suit was barred by RCRA.

B. California River Watch v. City of Vacaville

The California River Watch, a nonprofit organization, sued the City of Vacaville, alleging the City violated RCRA by contributing to the transportation of hexavalent chromium, a carcinogen, to the public through the City’s water distribution system. Specifically, River Watch claimed hexavalent chromium, originally from a federal hazardous waste site, migrated through the groundwater into the water wells of the city and into Vacaville residents’ homes.

The court was tasked with determining whether incidental movement of solid waste through the City’s water distribution system amounted to “transportation” under RCRA. The court analyzed the plain language meaning of transportation, in addition to the legislative history surrounding the term. Within the statute, transportation is used to describe the movement of solid waste “in direct connection with the waste disposal process.” In addition, other RCRA provisions imply transportation to mean the direct disposal of solid waste, not incidental. The court provided examples of direct transportation, including “shipping waste to hazardous waste treatment, storage, or disposal facilities.” The City’s incidental movement of hexavalent chromium through its water distribution system did not amount to transportation. Further, because River Watch failed to allege or prove the City transported hexavalent chromium as specifically part of its waste disposal process, the City cannot be held liable for transporting the carcinogen under RCRA.