Microplastics Regulations on the Horizon
In 2020, the California State Water Resources Control Board became the first regulatory body to define microplastics in drinking water. Its definition is based on particle size and sets the bounds of the size of microplastics to between one nanometer and 5,000 micrometers (generally ranging from the size of bacteria to the size of a pea). However, the universe of microplastics is a tangle of polymers, additives, colors, sizes, and shapes, complicating laboratory analysis and interpretation of exposure and toxicological studies.
California’s strategy is outlined in a draft handbook that specifies (1) adoption of sampling methodology, (2) requirements for testing and reporting of microplastics in drinking water, (3) consideration of notification levels, and (4) accrediting laboratories. In September of 2021, California released standardized methods for extraction and analysis of microplastics in drinking water via Raman spectroscopy and infrared spectroscopy, and the water board likely will adopt these methodologies this summer along with other components outlined in the handbook.
As we have seen with other emerging contaminants, once microplastics can be reliably detected with publicly available results, liability will likely follow.
Exposure and Human Health Effects
Microplastics’ messy morphology creates unprecedented complexity when trying to understand toxicity: particle shape, particle size, polymer type, and chemical additives all appear to be important characteristics potentially driving relative toxicity. To date, studies in rodents have identified male reproductive effects as the most sensitive adverse outcomes; however, human epidemiological studies have focused mostly on the inhalation pathway in occupational settings and have suggested inflammation and potential immunological effects. Current data gaps in human epidemiological evaluations and toxicological studies make derivation of regulatory thresholds based on human health effects highly uncertain.
Plastics Litigation on the Rise
Plaintiffs, however, are not waiting for the development of microplastics regulations but instead are suing plastics producers and users under existing legal theories. These cases (filed under federal environmental law, state consumer protection laws, as well as the common law) are having real impacts on industries that produce and use plastics.
Citizen suits find success in plastics litigation. One of the major avenues for plastics litigation to date has been through citizen suits. Many federal environmental statutes have citizen suit provisions that allow people and organizations to essentially stand in the shoes of the regulator and file lawsuits against alleged violators. These citizen suit provisions do not allow plaintiffs to recover damages, but they allow for monetary penalties, injunctive relief, and recovery of plaintiffs’ attorney fees. In recent years, environmental organizations have been using these citizen suit provisions to target plastics producers for discharges into the environment.
In one case, San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp., the plaintiff alleged that defendant Formosa Plastics Corporation was violating its Clean Water Act (CWA) discharge permit by discharging plastic pellets and PVC powder into a surface water body. Formosa, No. 6:17-CV-0047 (S.D. Tex. Jun. 27, 2019); CWA, 33 U.S.C. § 1251 et seq. Formosa had a CWA discharge permit that prohibited the “discharge of floating solids or visible foam in other than trace amounts.” Formosa, No. 6:17-CV-0047. The plaintiff surveyed Formosa’s activities and presented the court with photographic video and water sample evidence in an attempt to demonstrate that Formosa had violated this provision of its permit.
Formosa countered by arguing, in part, that the permit provision in question did not specify a weight or concentration for the discharge, so it was not in violation. The court disagreed, finding that Formosa discharged plastics on 736 different days in violation of its permit, calling Formosa a “serial offender.” Id. The court also held that Formosa failed to report its noncompliance, something that it was required to do under the permit.
After the court issued its decision, the parties entered into a consent decree to memorialize a settlement of the case. As part of the consent decree, Formosa was required to pay $50 million to fund environmental projects to offset the harm that it caused to the environment, as well as over $3 million in plaintiffs’ legal fees. Formosa also committed to a number of facility upgrades and monitoring requirements, as well as a zero-plastics-discharge commitment by 2024.
Plaintiffs have also used the federal Resource Conservation and Recovery Act (RCRA), which regulates solid and hazardous waste, as a mechanism to sue plastics producers. 42 U.S.C. § 6901 et seq. In Charleston Waterkeeper v. Frontier Logistics, L.P., plaintiffs sued Frontier Logistics, a plastics producer, alleging that Frontier discharged plastic pellets, contaminating a number of surface water bodies. No. 2:20-cv-01089-DCN (D.S.C. Mar. 18, 2020). The plaintiffs alleged that Frontier violated the CWA, but they also argued that, by discharging this solid waste, Frontier created an “imminent and substantial endangerment” to human health and the environment, a cause of action provided under the RCRA. Id.
Frontier settled the case long before trial, agreeing to pay $1 million to fund environmental projects to clean up the waterways. Frontier also paid $225,000 to cover plaintiffs’ legal fees. In addition, Frontier agreed to an independent audit of its facility and to implement the auditor’s recommendations regarding environmental safeguards.
Manufacturers in Perri subject to shareholder derivative suit. Manufacturers also have been subject to shareholder derivative suits for plastics-related claims. In the fall of 2021, a shareholder of Danimer Scientific, Inc., filed a derivative suit alleging that the company’s overstated sustainability claims led to millions of dollars in market capitalization losses. Perri v. Croskrey, No. 1:21-cv-01423 (D. Del. Oct. 6, 2021).
Danimer manufactures polymers, resins, and plastics alternatives that are used in a number of plastic products. The company claimed that its products were biodegradable and claimed that it could reduce plastics use and pollution. For one product in particular, “Nodax,” Danimer claimed that it was fully degradable within 12 to 18 weeks after being discarded. According to a Danimer press release, Nodax is a “100% biodegradable, renewable, and sustainable plastic . . . certified as marine degradable, the highest standard of biodegradability, which verifies the material will fully degrade in ocean water without leaving behind harmful microplastics.” Id. The company made similar representations about Nodax in an SEC Form S-1 registration statement.
Shortly after these statements went public, the Wall Street Journal published a detailed article refuting Danimer’s biodegradation claims. The article cited experts that were skeptical of whether Danimer’s products could really degrade as quickly as advertised under real-world conditions. The article noted that things like ocean temperature, microorganism variation, and plastics shape and size all impact biodegradability and may result in significantly longer timelines for degradation. The next trading day, Danimer’s stock price dropped by almost 13 percent.
The plaintiff, a Danimer stockholder, filed the derivative suit against the company’s CEO and chairman of the board, CFO, and a number of the company’s directors. The plaintiff claimed that these officers and directors breached their fiduciary duties to the company by intentionally or recklessly allowing these misstatements to occur, which resulted in significant losses. The plaintiff also sued the officers and directors for unjust enrichment, waste of corporate assets, and breaches of the Exchange Act. The case was ultimately stayed, but it provides a good example of another potential area of exposure for manufacturers.
Companies are sued for contributing to worldwide plastics pollution. Lastly, plastics users are being targeted in court for their alleged contribution to worldwide plastics pollution. Earth Island Institute is suing companies such as Coca-Cola, Crystal Geyser Water, Clorox, Colgate-Palmolive, and others, alleging that these companies produce and use plastic products that contaminate the environment and that these products are not as recyclable as the companies claim. Earth Island Inst. v. Crystal Geyser Water Co., No. 20CIV01213 (Cal. Sup. Ct. Feb. 26, 2020). The lawsuit calls for these companies to stop polluting, but the plaintiff also seeks recovery of resources that it is required to expend to combat plastics pollution.
What Can You Do?
We are only now at the beginning of what will likely be a long road to microplastics regulation. But, as scientific knowledge and sampling efforts develop, regulatory bodies will be looking for ways to stop microplastics from being released into the environment, as well as to clean up those that are already there. And so will plaintiffs. As we have seen with other emerging contaminants, such as per- and polyfluoroalkyl substances (PFAS), these efforts often involve not just the direct product producer but also many companies that may have used the regulated product (and also many that never used it at all). Given the ubiquitous nature of microplastics in the environment, regulatory agencies and plaintiffs alike may cast a wide net when identifying potentially responsible parties. But even before we have robust microplastics regulations, plaintiffs are already using existing laws to find ways to target plastics in the environment, from citizen suits to challenging claims regarding sustainability and recycling as they relate to plastics.
So, what can plastics producers and users do now? Manufacturers may want to survey their operations and supply chains to determine how plastics are being used—and potentially released into the environment. Manufacturers also may want to evaluate their permits, licenses, approvals, and regulations that apply to their operations to determine if there are ways that an administrative agency, or a plaintiff, may use those mechanisms to address plastics releases. And smart manufacturers will also want to keep an eye on what happens in California as it moves through the regulatory process for microplastics because its efforts are likely to be a model for other jurisdictions. These regulations have the potential to directly or indirectly impact plastics producers and users as agencies and plaintiffs look for ways to address microplastics pollution and curtail future releases of the contaminant.