Environmental Law Archives - Dawda PLC

Navigating the New Legal Landscape: Implications of the Supreme Court’s Chevron Doctrine Decision

Editor — Mon, 29 Jul 2024 14:46:38 +0000

In its recent decision in Loper Bright Enterprises v. Raimondo/Relentless, Inc. V. Department of Commerce, the Supreme Court struck down the Chevron doctrine; a seismic shift in the American regulatory landscape. This landmark ruling, which curtails the power of federal agencies to interpret ambiguous laws, has far-reaching implications for employers and manufacturers across the nation. How will this change impact your business operations and compliance strategies?

At its core, the Chevron doctrine (which was established by the Court during the Reagan era) provided federal agencies with significant deference in interpreting ambiguous statutes. The Court’s decision to overturn this long-standing principle now places the onus of interpretation squarely on the judiciary. This shift presents certain benefits and concerns for businesses operating in regulated industries:

Benefits

Regulatory Flexibility. Federal agencies, knowing that their rules could be easily challenged in court and wanting to avoid that, will have to be proactive. They will be more likely to consider competing views and alternatives at the outset, rather than waiting for them to bubble up through the public comment period.
More Business Input. The comments submitted by the regulated community during the public comment period will be assessed more closely. Agencies will have to either incorporate them or provide compelling arguments why they should not be incorporated.
Fewer Rules. Federal agencies may be less inclined to go through the rulemaking process for marginal issues.

Concerns

Regulatory Uncertainty

The elimination of agency deference introduces a new era of regulatory uncertainty. Judges with little or no expertise will have to weigh in on matters ranging from drug efficacy to automobile safety and assess the competing views of agency and regulated community experts. We think this could result in federal rules being upheld or rejected based on the judicial temperament of a judge or judges and, possibly, inconsistent rulings. This fragmentation of regulatory interpretation poses a significant challenge for businesses seeking to maintain uniform compliance standards across state lines.

Increased Litigation Risk

With courts now bearing the responsibility for statutory interpretation, we foresee a surge in litigation as various stakeholders challenge agency rulemaking. This will draw out the rulemaking process and leave businesses guessing what the outcome could be. .

Operational Disruptions

Agencies such as the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) possess specialized technical expertise crucial for interpreting complex regulations. The transition to judicial interpretation may result in less informed decisions and unworkable outcomes in the real world; potentially leading to operational disruptions and increased compliance burdens.

Strategic Planning Challenges

As rules become law, businesses will be forced to either rely on the validity of the rule in making business decisions or wait and see the outcome of litigation. The ruling necessitates a reevaluation of strategic planning and compliance strategies. Businesses must now prepare for a more dynamic and potentially volatile regulatory environment. This uncertainty may impact long-term investments and operational decisions. Have you considered how this change might affect your company’s five-year plan or capital allocation strategies?

Financial Implications

The ripple effects of this decision extend to the financial realm. Companies may need to allocate additional resources to monitor and respond to regulatory changes and legal interpretations. This reallocation could impact overall financial planning and potentially affect shareholder value. How will your organization balance these new compliance costs against other business priorities?

In light of these challenges, proactive measures are essential. Consider the following strategies:

Enhance your legal and compliance teams to monitor and analyze judicial decisions across various jurisdictions.
Develop flexible compliance frameworks that can adapt to evolving interpretations of regulatory statutes.
Engage in industry trade groups to advocate for clear legislative language, reducing ambiguity in future regulations.
Implement robust risk management strategies to mitigate potential liabilities arising from regulatory uncertainties.
Conduct regular audits of your compliance programs to ensure they align with the latest judicial interpretations.

While the Court’s decision represents a victory for proponents of reduced federal agency power, it undeniably introduces new complexities. The path forward requires vigilance, adaptability, and a commitment to staying abreast of the evolving legal landscape.

As we navigate these uncharted waters, Dawda stands ready to guide you through the complexities of this new regulatory environment. Our team of experienced legal professionals is committed to helping you mitigate risks, ensure compliance, and capitalize on opportunities in this transformed legal landscape.

Are you prepared to meet the challenges and seize the opportunities presented by this landmark decision? Let us work together to safeguard your interests and position your business for success in this new era of regulatory interpretation.

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PFAS Reporting Rule: Navigating the New Landscape of Chemical Compliance

Editor — Mon, 22 Jul 2024 14:28:15 +0000

The Environmental Protection Agency’s (EPA) finalization of the Per- and Polyfluoroalkyl Substances (PFAS) TSCA Section 8(a)(7) reporting rule in accordance with the National Defense Authorization Act of 2020 marks a watershed moment in the regulation of these chemical compounds. This new rule presents unprecedented challenges and responsibilities for manufacturers, importers, and a wide range of industries.

The scope of this rule is notably expansive, encompassing a broader definition of PFAS and applying to any entity that has manufactured or imported these substances for commercial purposes since January 1, 2011. Unlike previous regulations, this rule provides no de minimis exemptions and includes importers of articles containing PFAS.

The reporting requirements are equally extensive. Companies must provide detailed information on chemical identity, production volumes, byproducts, uses, exposures, disposal methods, and known health and environmental effects. This level of scrutiny necessitates a thorough examination of current and historical operations. This will challenge record-keeping systems requiring data spanning over a decade.

Perhaps most significantly, the rule eliminates exemptions for small manufacturers and low-volume thresholds. This universal application dramatically increases the number of entities required to comply.

The financial implications of compliance are substantial. The EPA estimates an industry-wide burden of 11.6 million hours and $876 million in compliance costs. These figures underscore the need for strategic resource allocation and potentially significant investments in data management and reporting systems.

Compliance deadlines are approaching rapidly. Most entities must submit their final reports by May 8, 2025, while small manufacturers/article importers whose PFAS reporting obligation is solely due to importing articles containing PFAS have until November 10, 2025. This timeline necessitates immediate action to ensure comprehensive data collection and accurate reporting. Is your organization prepared to meet these deadlines?

To navigate this complex regulatory landscape effectively, consider the following strategies:

Conduct a thorough inventory of all products and processes that may involve PFAS.
Implement robust data management systems capable of capturing and organizing historical information.
Establish cross-functional teams to coordinate compliance efforts across all relevant departments.
Develop a comprehensive compliance timeline, allowing for unforeseen challenges and potential data gaps.
Engage with industry associations and legal counsel to stay abreast of interpretations and best practices.

The PFAS reporting rule represents a significant shift in chemical regulation, demanding unprecedented levels of transparency and accountability. While the challenges are substantial, proactive compliance can position your organization as an industry leader in environmental stewardship and regulatory adherence.

At Dawda, we understand the complexities of this new regulatory landscape. Our team of experienced environmental attorneys is prepared to guide you through every step of the compliance process, from initial assessment to final reporting. We can help you develop strategies to mitigate risks, optimize resource allocation, and ensure comprehensive compliance.

As we enter this new era of chemical regulation, the question remains: How will your organization not just comply, but thrive under these new requirements?

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Major Change In Land Use Laws For Solar And Wind Developments

Editor — Mon, 27 Nov 2023 19:23:48 +0000

Land use approvals for solar and wind developments will no longer be subject to spotty and sometimes arbitrary local zoning ordinances. They will now be approved under new renewable energy laws which give most of the control over such land use approvals to the Michigan Public Service Commission (MPSC). Local control under zoning ordinances is now muted and, in some instances, could be eliminated for renewable energy projects.

On November 2, 2023, the Michigan House of Representatives passed House Bill 5120 and House Bill 5121. The package of bills passed the Senate on November 8, 2023, and are currently awaiting final approval from Governor Gretchen Whitmer, expected in the coming weeks.

Under the new laws, Michigan’s Clean and Renewable Energy and Energy Waste Reduction Act will be amended to allow either utilities or independent power producers to apply for a certificate from the MPSC. Although the process of obtaining a certificate will allow local units of government to contribute to and potentially challenge the approval of renewable energy projects within their jurisdictions, the decision of the MPSC to issue the certificate could control regardless of objections. While some lawmakers believe the legislation will encourage and facilitate Michigan’s lofty renewable energy goals, others argue that local municipalities should not lose their historical ability to control land uses.

The legislation takes effect in 1 year. Presumably, this delay will allow the MPSC to pass rules on the details of how it will issue certificates. Also, it is possible that judicial challenges will be made to the laws since many municipalities and public interest groups oppose such legislation on constitutional grounds.

Dawda is counseling its clients, engaged in renewable energy projects and related land use entitlements, to anticipate the impact of these new laws. Reach out to attorneys Tyler Tennent and Alex Masson at Dawda to find out how your renewable energy projects will be affected.

Article submitted by Tyler Tennent and Alex Masson

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Von Duprin LLC v Major Holdings LLC: The hard lesson of Phase I Environmental Site Assessments that Don’t Comply with Regulatory Requirements

Editor — Tue, 28 Jun 2022 17:20:36 +0000

Real estate attorneys generally know the importance of obtaining a current Phase I Environmental Site Assessment (“Phase I”) as part of a real estate acquisition for a client. Doing so allows the buyer to limit the risk of acquiring a contaminated site that may interfere with development AND qualify for Federal and State statutory defenses to liability for contamination. But how many real estate attorneys review a Phase I to determine if it covers all of the property in question? More important, how many understand how the Federal All Appropriate Inquiry (“AAI”) rule or ASTM¹ E1527 (the standards governing the preparation and content of a Phase I) fit into the big picture? How many attorneys review a Phase I to assess consistency with those standards versus simply skim the executive summary to see if the consultant identified any RECs (Recognized Environmental Conditions) and, finding no RECs, tell the client (or the broker) that the property is “clean” and move on? If you are one of the real estate attorneys that just focus on RECs in a Phase I, you may be making a serious mistake that harms your client.

Why is that? Well, consider this example. A client was interested in purchasing an investment property that was developed with a new fueling station on it. Because the development was a new build on previously unused property, the Phase I that was provided to the client did not identify any RECs.

However, the Phase I did not cover all the property that was part of the deal – significantly a small corner parcel which was one of the parcels being sold was the location of a closed leaking underground storage tank (“LUST”) site with residual contamination and deed restrictions limiting certain uses.

Luckily, that was identified by the environmental attorney that reviewed the report and the former LUST parcel was carved out of the deal.

Relatively speaking, that was an easy omission to catch. There are other potential pitfalls for real estate attorneys. Reviewing a Phase I to determine whether it is consistent with AAI rule or ASTM standard is much more difficult for the “dabbling” real estate attorney. Consider the recent ruling by the 7^th Circuit in Von Duprin LLC v. Major Holdings LLC, No. 20‐1711 & 20‐1793 (2021). In that case, Von Duprin was a potentially responsible party for contamination involving a number of different properties. After performing significant remediation, Von Duprin relied on CERCLA Section 107(a) to recover its costs from other property owners, including Major Holdings which did not cause any of the contamination.

Major Holdings asserted that it was covered by CERCLA’s bona fide prospective purchaser (“BFPP”) defense. The district court, however, determined that Major Holdings could not rely on that defense (for at least two of the properties) because Major did not satisfy the “all appropriate inquiry” requirement of the defense. The Court of Appeals upheld the lower court’s BFPP ruling finding that the Phase I did not include certain attestations about the environmental consultant’s qualifications which were required by the Federal All Appropriate Inquiry (“AAI”) rule. A client’s defense to liability was lost because the consultant forgot a simple ministerial act when finalizing the Phase I – and the attorney didn’t catch it.

While the Von Duprin case deals with the Federal AAI rule in place in 2007, the current AAI rule incorporates ASTM E1527‐13. The 2013 ASTM standard sets forth the criteria that consultants (or environmental professionals per ASTM) must follow to prepare a Phase I that is compliant with AAI. The standard is detailed and identifies what records must be reviewed, how the site reconnaissance must be performed, who must be interviewed, and how the report must be signed, as well as other criteria.

In November, 2021, ASTM updated its standard which is now E1527‐21 and the EPA is in the process of adopting that as part of its AAI rule. The new ASTM standard differs from the 2013 version in several key respects:

A formal definition has been given to Significant Data Gap which is a data gap that affects the ability of the environmental professional (or consultant) to identify a If a SDG is identified, the consultant must comment in the Conclusions section as to how the SDG impacts the EP’s ability to identify a REC.
The Phase I must provide the dates when the specific components of the Phase I were performed (interviews, lien search, review of government records, and visual inspection).
To meet the requirements of the Federal AAI rule, Users (the person or entity relying on the Phase I) must perform a search for environmental liens and activity use limitations (“AULs”). Users can do this using a title commitment or a title search of documents recorded between 1980 and (Note this search is not the responsibility of the consultant but consultants will do it for an extra fee. If the User does not do this itself or direct the consultant to do this, consultants will frequently note in Phase Is that the User did not provide any title commitment or title search.)
The Phase I must include a Findings and Opinions The Findings section should “identify those features, activities, uses, and condition that….may indicate the presence or likely presence of hazardous substances or petroleum products at the subject property.” The Opinions section must include the consultant’s opinions and rationale regarding how the findings have impacted the subject property, including the consultant’s rationale for concluding whether, or not, a finding is a REC (or CREC², HREC³ or de minimis).
The consultant should also provide an opinion in the Additional Investigation section regarding whether any testing should be performed to detect the presence of hazardous substances or

In addition to the above, another layer of complexity has been added by the inclusion of a clarification in Appendix X6.10 of the ASTM standard relating to “emerging contaminants” such as PFAS⁴. The standard states that PFAS are not part of the 2021 standard because PFAS compounds are not technically identified as CERCLA hazardous substances. However, the 2021 ASTM standard notes that some PFAS may be considered hazardous substances under State law and when they are identified as hazardous substances under CERCLA, they must be evaluated as part of a Phase I.

This is very important because Michigan has published Part 201 cleanup criteria for certain PFAS compounds⁵. As a result, those compounds are hazardous substances for Part 201 purposes.

The Federal government isn’t far behind. The White House and EPA recently took a large step toward classifying certain PFAS compounds as CERCLA hazardous substances. In a June 15, 2022, press release⁶, the White House announced that the EPA will be issuing a proposed rulemaking establishing PFOA and PFOS as CERCLA hazardous substances. On the same day, the EPA announced substantially lower lifetime health advisory limits (“HALs”) for 4 PFAS compounds: PFOA 0.004 ppt, PFOS 0.02 ppt, PFBS 2000 ppt, and 10 ppt for HFPO). The EPA also announced that it will propose a national PFAS drinking water regulation in the fall of 2022.

As you can see, even though the EPA has not identified any PFAS compounds as CERCLA hazardous substances that doesn’t mean it’s irrelevant with regard to current Phase I assessments. To the contrary, in a relatively short time period (possibly within the viability period of existing Phase Is), PFOA and PFOS will be CERCLA hazardous substances; and other compounds will follow thereafter. So attorneys need to be considering not only whether to have Phase Is performed in accordance with ASTM E1527‐21, but also whether to include an assessment of the site for PFAS related RECs. This is especially the case for sites in Michigan where the PFAS compounds noted above are already relevant to Part 201 liability defenses, including baseline environmental assessments.

As the Von Duprin case makes clear, dabbling in Phase I reviews is a minefield for real estate attorneys. Don’t review your client’s Phase I just for the RECs. Have an environmental attorney review your client’s Phase I to: determine if PFAS compounds should have been considered AND to make sure it complies with the AAI or ASTM requirements. Otherwise, your client could lose a Federal or State statutory defense or exemption to liability for pre‐existing contamination.

¹ The American Society for Testing and Materials has established a written standard regarding the preparation of Phase Is. For the past 8 years, that standard has been ASTM E1527‐13.

² Controlled REC – a REC that has ben addressed to the satisfaction of the regulatory authority with hazardous substances left in place.

³ Historical REC – a REC that has been addressed to the satisfaction of the regulatory authority and meeting unrestricted use criteria.

⁴ PFAS is an acronym for per and polyfluoroalkyl substances ‐ a large group of fluorinated compounds that are extremely stable, ubiquitous and believed to adversely impact human health.

⁵ Perfluorobutane sulfonic acid (PFBS), perfluorohexane sulfonic acid (PFHxS), perfluorohexanoic acid (PFHxA), perfluorononanoic acid (PFNA), perfluoroocatanoic acid (PFOA), hexafluoropropylene oxide dimer acid (HFPO‐DA), and perfluorooctane sulfonic acid (PFOS). Michigan also has established

⁶ https://www.whitehouse.gov/briefing‐room/statemsents‐releases/2022/06/15/fact‐sheet‐biden‐harris‐administration‐ combatting‐pfas‐pollution‐to‐safeguard‐clean‐drinking‐water‐for‐all‐americans/

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Suit results in change to brook trout regulation in the UP

Lauren Daigle — Mon, 13 Jan 2020 21:01:27 +0000

Originally published in Michigan Trout Unlimited

In November 2019, the Michigan Natural Resources Commission voted 3-2 to amend Fisheries Order 200.20 to reinstate a 10 brook trout daily bag limit regulation on 33 sections of streams in the Upper Peninsula. The NRC issued the Order despite comment provided by Michigan Trout Unlimited opposing it and despite DNR Director Dan Eichinger publicly stating the DNR’s opposition to the reinstatement of the 10 brook trout bag limits based on known scientific evidence.

Following that action, Michigan Trout Unlimited initiated legal action against the NRC, filing both an appeal in circuit court and a contested case proceeding through the administrative appeals system. Both were based on the Scientific Fish & Wildlife Management Act, which requires the NRC to base its fish and wildlife management decisions on sound scientific principles. Michigan TU was represented legally by TU member Brian Considine with the firm of Dawda, Mann, Mulcachy and Sadler, as well as by TU member Dave Whitfield. Their legal assistance was graciously provided on a pro bono basis.

This was, to our knowledge, the first time that any entity had filed suit against the NRC under the Scientific Fish & Wildlife Management Act. Michigan TU took legal action because of the compelling biological and social science available which highlighted the impairment to brook trout and brook trout fisheries that result. Michigan TU has viewed this regulation as flawed and detrimental since it was proposed in 2012. We predicted the negative impacts of this regulation prior to its experimental implementation in 2013 and continued to advocate against it following DNR studies concluded in 2016 which confirmed its negative impacts on the fishery.

During the pendency of the legal proceedings, the Natural Resources Commission, at its January 9, 2020 meeting, voted and approved removing the 10 brook trout daily bag limit regulation on all sections of streams where this limit had been in place (returning them to the default Type 1 regulation). The NRC’s elimination of the 10 fish bag limit ends Michigan TU’s lawsuit.

Since this issue arose in 2012, Michigan TU has communicated to its members numerous times about it, and we are pleased to share the good news with you now, that the NRC found its way to righting the course and upholding its mandate for scientific fish and wildlife management. This represents a win for the NRC and their processes for ensuring credible, justifiable science-based decision-making; for Michigan conservationists, and for the future of brook trout populations our grandchildren will inherit.

Since its inception, TU has advocated for science-based fish management with the premise that if you take care of the fish, the fishing will take care of itself; what’s good for the fish is good for the fishing. Our position is based upon the belief that science should matter, and in Michigan the law states it must. Michigan TU was and is prepared to take all steps necessary to ensure this.

For 8 years this issue has consumed time, attention and precious resources and we are pleased that the NRC has voted consistent with the Scientific Fish & Wildlife Management Act to bring it to an end. Michigan TU looks forward to all the productive work ahead to ensure Michigan’s coldwater fisheries remain vibrant for generations to come.

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PFAS and Professional Baseball

Lauren Daigle — Wed, 22 May 2019 15:54:06 +0000

by Brian Considine

You have probably heard many concerns being raised about something called PFAS. PFAS stands for per- and polyfluoroalkyl substances, which are a group of widely used compounds that have been used in everything from non-stick pots and pans to firefighting foam. They have also been used for furniture, carpeting and clothing to give those products a spill-resistant, water repellant quality. Their large molecular compounds and their structure not only provides the non-stick, foaming and water repellant properties that are useful to humans, it also makes them very stable and resistant to breakdown, either by nature or human processes. This is why they are called “forever chemicals” and makes them potentially dangerous because they have a tendency to bioaccumulate, or build up in the food chain.

What you probably have not heard of is PFAS’ relationship to Major League Baseball. The Detroit Free Press recently reported that a number of professional baseball players were potentially exposed to PFAS-impacted drinking water when they played with the West Michigan White Caps in Grand Rapids.

According to the Detroit Free Press, a number of baseball players, including Detroit Tiger Nicholas Castellanos, were potentially exposed to PFAS while staying with a host family in Grand Rapids whose drinking water well has been contaminated by a former shoe factory owned by Wolverine Worldwide.

Should these players be concerned? It’s really an open issue. PFAS compounds have received close scrutiny lately because of their bioaccumulative properties and certain studies that have linked high concentrations of the compounds to problems observed in laboratory test animals. However, there is no consensus as of yet as to whether there is a safe limit. Also, the baseball players stayed with the family short periods of time.

The U.S. EPA has set a drinking water standard of 70 parts per trillion (ppt). One ppt is the equivalent of one drop of substance in 20,000 swimming pools.

However, there is some question as to whether or not the U.S. EPA’s level is adequately protective of human health. For example, Michigan’s PFAS Science Advisory Panel assessed PFAS and its related compounds in its December 7, 2018 report. In that report, the Panel concluded that “if one accepts the probable links between PFOA exposure and adverse health effects detected in the epidemiological literature as critical effects for health risk assessment, then 70 ppt in drinking water might not be sufficiently protective for PFOA.”

Some states have taken a more restrictive approach. New Jersey has a drinking water standard of 13 ppt for PFNA and a proposed regulation of 14 ppt for PFOA. California, on the other hand, has a combined PFOA and PFOS limit of 70 ppt with notification levels for PFOA at 14 ppt and PFOS at 13 ppt.

Michigan has cleanup standards for PFOA and PFOS but no established drinking water standard. The residential and non-residential drinking water clean-up standard for groundwater is 0.07 parts per billion (ppb), or 70 ppt. The groundwater/surface water interface criteria (GSI) is 0.12 ppb, or 12 ppt for PFOS. Up until recently, Michigan has relied on the EPA standard of 70 ppt for PFOA and PFOS combined; however, Michigan has recently started a rule-making process for PFAS compounds in drinking water, and it is expected that the final rule will be much lower than this.

Most likely, Michigan will adopt a drinking water standard similar to the health screening levels established by the Michigan Department of Health and Human Services. Those levels are 9 ppt for PFOA, 8 ppt for PFOS, 9 ppt for PFNA, 84 ppt for PFHxS and 1,000 ppt for PFBS. In addition, Michigan has recently cautioned Michigan residents from touching foamy water near sites that have been contaminated with PFAS compounds.

Michigan has a new rulemaking process and the PFAS rulemaking will be one of the first to go through this process. Even if rules are established, they could be challenged because Michigan has a new law (MCL 24.232(9)) that prohibits rules that are more stringent than a federally established level unless it can be established that there is a clear and convincing need to exceed the federal level. Since the Federal Government has not formally adopted a standard for PFAS, this may not be an issue, however, given the stakes involved, there is a possibility that some interested party could challenge it. Whatever level (or levels) the State arrives at, you should expect even more scrutiny of PFAS issues around the State.

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What is the Mackinac Bridge Authority (and what does it have to do with a pipeline)?

Editor — Mon, 26 Nov 2018 21:36:45 +0000

By Sue Sadler.

The Mackinac Bridge Authority is a seven-member Board that was established in the 1950s that provides oversight, legal and financial services to maintain the Mackinac Bridge. In October 2018, Governor Snyder appointed Mike Zimmer, a former Cabinet Director to the Executive Office of the Governor and Kirk Steudle, the Director of the Michigan Department of Transportation, as Board Members of the Mackinac Bridge Authority.

Almost simultaneously with the new appointments to the Bridge Authority, the Governor announced that an agreement had been reached between the State of Michigan and Enbridge Energy. The Tunnel Agreement culminates extended negotiations regarding the future of “Line 5” within the “Straits of Mackinac.” The Agreement allows Enbridge Energy to continue the use of Line 5 for the transport of light crude oil and natural gas fluids. The focus of the Agreement is on the 4.09 miles of parallel pipelines that lie below the Mackinac Straits, which are used to transport fluids within a much longer pipeline system operated by Enbridge.

The Agreement contemplates that in the future Enbridge will use a horizontal directional drilling machine to create a tunnel that will encase a single larger pipeline for future transport of light oils and natural gas liquids. The Agreement requires Enbridge to cover the cost of design and construction of the pipeline and then Enbridge will decommission the older Line 5 parallel pipelines. The cost of this project is projected to be $350 to $500 Million.

The potential catch in implementing the Tunnel Agreement brings us back to the Mackinac Bridge Authority. The Agreement requires Enbridge to enter into a public-private partnership with the Mackinac Bridge Authority. Upon completion of the Straits Tunnel, the Bridge Authority would assume ownership of the Straits Tunnel. In the interim, the Authority would also provide Enbridge with necessary leases and other agreements to facilitate the construction and completion of the Straits Tunnel.

On November 8, 2018, the Mackinac Bridge Authority conducted an introductory and informational meeting regarding the Tunnel Agreement. Representatives from the Michigan Department of Natural Resources and design consultants presented an overview of proposed tunnel and recently adopted safety measures to prevent spills in the Straits. Opponents of the Mackinac Bridge Authority accepting the Tunnel Agreement, and the delegation of control of Pipeline 5 to the Bridge Authority, were very vocal at the meeting. The opponents contend the Bridge Authority is not capable or staffed to take on this expanded role. Certain Native American groups argued that the Tunnel Agreement is invalid for not considering certain rights of tribes to fish in the Straits.

In the interim, Senate Republicans have introduced legislation to expand the role of the Mackinac Bridge Authority, which would ultimately own and operate the Straits Tunnel to be constructed by Enbridge.

If the Bridge Authority rejects taking on this new role of ownership and oversight, many questions remain as to how this would impact the original Tunnel Agreement and whether this would allow Enbridge Energy to continue its transport of oils and gas through the older, lesser protective Line 5 pipelines.

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Michigan’s New Environmental Science Advisory Board

Editor — Wed, 10 Oct 2018 19:24:15 +0000

By Brian Considine.

On October 4, 2018, Governor Snyder appointed members to the newly created Environmental Science Advisory Board. The individuals are:

Kimberlee Kearfott, professor of nuclear engineering and radiological sciences, biomedical engineering and applied physics at the University of Michigan.

Dianne McCormick, director/health officer of the Livingston County Health Department.

Ashley Moerke, director of the Center for Freshwater Research and Education and a professor for the School of Natural Resources and Environment at Lake Superior State University.

Lawrence Lemke, professor and chair of the Department of Earth and Atmospheric Sciences at Central Michigan University.

Steven Pernecky, professor in the Department of Chemistry and associate dean of the College of Arts and Sciences for Eastern Michigan University.

George Wolff, principal scientist for the environmental consulting firm Air Improvement Resource, Inc.

Lauren Brown , scientist for Abt Associates with experience in chemical risk assessment.

John Matonich, board chair for Rowe Professional Services Company, Inc. and previously served as chair of the Michigan Natural Resources Commission..

Joan Rose, professor and co-director for the Center for Advancing Microbial Risk Assessment at Michigan State University.

The Governor was given power to establish this Board when he signed into law Act No. 269 of the Public Acts of 2018 (the “Act”). The Board is investigatory only and is intended solely to advise the Governor on matters affecting the protection of the environment and management of the State’s natural resources. Although the Board addresses matters regarding the environment and natural resources, it is not a division of either the Department of Environmental Quality or the Department of Natural Resources but rather resides in the Department of Technology, Management and Budget.

Pursuant to Section 2603(2) of the Act, the Board is comprised of 9 individuals who are not compensated for their services and must have an expertise in 1 or more of the following specialties:

(a) Engineering.

(b) Environmental science.

(d) Chemistry.

(e) Geology.

(f) Physics.

(g) Biology.

(h) Human medicine.

(i) Statistics.

(j) Risk assessment.

(k) Other disciplines that the governor considers appropriate.

The Board may provide advice on a given issue only when requested to do so by the Governor. Upon receiving such a request, the Act requires the designated chairperson to convene a committee comprised of board members with expertise relevant to the issue and the committee formulates recommendations.

As set forth in Section 2609(2) of the Act, there are two key factors that the Board and any committee must follow in carrying out its investigatory and advisory duties: objective reasoning and sound science. In addition, if requested by the Governor, the board shall consider all of the following factors in rendering its opinions: relative and realistic risks to human health and the environment, practices used by the federal government and agencies of other states, economic reasonableness and any other factor specified by the Governor. When carrying out its duties, the Board must conduct its business at public meeting in accordance with the Open Meetings Act (MCL 15.261 et seq.)

The Board cannot review or give advice on any permit, license or environmental impact statement, and the advice provided by the Board is not legally binding on any individual or governmental agency.

Although the creation of the Board seems relatively benign, there are a number of questions that will invariably arise given the purpose of the Board and language of the Act. For example, what does the Act mean by “objective reasoning” and “sound science”? Are these undefined, broad terms open to such a wide range of interpretation that they will make the Board’s recommendations subject to criticism? Similarly, what is meant by “relative and realistic” risk? Is that the same as the “likelihood” of the risk and, if so, would it not also be important to balance that with the cost of the outcome if the risk comes to fruition? (ie, low risk/catastrophic outcome versus high risk/low impact outcome). The Board is given the power to adopt operating procedures, but does that include the ability to define what these terms are to include? Unfortunately, these questions will have to be answered “on the fly” as the Board is given assignments by future Governors.

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Major Changes to Rules Governing the MDEQ

Editor — Wed, 19 Sep 2018 13:19:14 +0000

By Brian Considine.

The New Gatekeepers at the MDEQ

On June 28, 2018, Governor Snyder signed into law a package of bills intended to reign in the Michigan Department of Environmental Quality (“DEQ”) which some in the regulated community feel has an “agenda.” This article is the second in a three part series and summarizes Senate Bill 652 which became Public Act 267 of 2018.

Public Act 267 (the “Act”), which has an effective date of June 29, 2018, amended the Administrative Procedures Act (MCL §24.201 et seq.) and created what is commonly referred to as the “environmental rules review committee” (the “ERRC”). The purpose of the ERRC is to review any new regulations proposed by the DEQ.

As soon as Senators Casperson (R-38 Dist) and Robertson (R- 14 Dist) proposed SB 652 (along with SBs 653 and 654) battle lines were drawn. Senator Casperson asserted that that the bills were necessary because of DEQ staff who are too often arbitrary and unreasonable in their decisions: “It’s not rules and laws they are following; it’s an agenda…they are going to save the planet, no matter what.”[1] Lisa Wozniak of the Michigan League of Conservation Voters saw it differently: “Instead of relying on science to guide decisions that impact our land, air and water, this legislation gives polluters undue influence over the state agency charged with protecting our communities and natural resources.” [2] Despite the rhetoric on both sides, in the end, the Governor signed the legislation into law.

Section 65(1) of the Act, created the ERRC as an independent body in the Office of Performance and Transformation which itself was created within the State Budget Office in 2016 by Executive Order 2016-4.[3] From the get-go, many stakeholders were troubled by the composition of the ERRC which is composed of a majority of industry leaning members.

Composition of the ERRC

The ERRC is composed of four non-voting members and twelve voting members. The non-voting members include the directors of the Departments of Environmental Quality, Health and Human Services (“DHHS”), Agriculture and Rural Development and Natural Resources. The voting members, who are appointed by the Governor with the advice and consent of the Senate, consist of one representative from each of the following six industries: solid waste management, manufacturing, small businesses, public electrical utility, oil and gas, and agriculture. The other members include representatives of: an environmental organization, local government, land conservancy, and public health. The ERRC is rounded off with two members of the general public. Act §65(2).

Qualifications of ERRC Voting Members

To ensure the ERRC is competently staffed to handle complex scientific issues related to public health and the environment, each voting member must “possess knowledge, experience, or education that qualifies him or her to represent” their respective constituency. Act §65(3). In addition, the directors of the DEQ and the DHHS must each select a science advisor to provide expert advice to the ERRC members on relevant science-based issues and those advisors must possess the requisite credentials to act in such capacity. Act §65(13). ERRC members may also select their own administrative, technical and legal consultants to assist the ERRC to carry out its duties. Act §65(18).

Conflict/Bias Provisions

Because ERRC members are selected by the Governor (who has his or her own political affiliations), the Act has several mechanisms to reduce bias and prevent conflicts of interest. Members are appointed with the advice and consent of the senate, member terms are staggered (Act §65(7)), and no more than six of the voting members can be members of the same political party (Act §65(6)). In addition, Section 65(4) prevents someone from being a voting member of the ERRC if they: are currently employed by any State agency or has been at any time within the preceding three years or the person (or their employer) has had a contract with the DEQ in the preceding three years that generated more than 5% of the member’s annual gross income or member’s employer’s annual gross revenue. In addition, Section 65(9) gives the Governor the right to remove a voting member for cause. This, however, is a double edged sword because a Governor could not only use this right to remove a member with conflicts of interest but could also remove legitimate member for political reasons.

ERRC Review Process

As explained in Section 65(19), “the purpose of the [ERRC] is to oversee all rule-making of the [DEQ].” Rules that are not processed in compliance with section 66 are invalid. Act §43(1). The only exception is when an emergency necessitates quicker action. Act §§48(1) and (2).

As a result of the changes made to the APA, the actual rule-making process that the DEQ must now follow much more complex. As before, if the DEQ is contemplating any changes to its rules, it must file a request for rule-making with the Office of Regulatory Reinvention. MCL 24.239(1). However, the DEQ must also transmit the request for rule-making to the ERRC and the DEQ is encouraged, but is not obligated to form a stakeholder review. Act §66(1). If the chair and vice chair of the ERRC determine that no review is needed, the ERRC does not review the proposed rules. However, this decision can be overruled by a vote of seven or more members.

If the ERRC decides to review the rules, they must decide if the rules satisfy all of the following criteria:

They do not exceed the rule-making delegation in the relevant authorizing statute;
They reasonably implement and apply the statute and are otherwise consistent with other law;
They are necessary and suitable to achieve their purposes in relation to the burdens placed on business;
They are clear and unambiguous considering the subject matter and businesses that will have to comply with the rules;
They are based on sound and objective scientific reasoning. Act §66(4).

Under Section 66(5), the ERRC has 35 days to review the above and then decide one of the following:

By a vote of 9 members, to allow the rule-making to proceed forward normally under the APA;
By a majority vote, that the 5 criteria have not been met or that more information is needed and notifies the DEQ, in which case the DEQ must address the ERRC’s concerns. If the ERRC has not made a decision (within 90 days after notifying the DEQ of the deficiencies) that the proposed draft rules or revised draft rules satisfy the 5 criteria, then the DEQ is to proceed with a public hearing under APA §§41 and 42.
By a majority vote, that the 5 criteria have been satisfied and that the DEQ is to proceed with a public hearing under APA §§41 and 42.

If the ERRC fails to make the Section 66(5) determination in 35 days, the DEQ may proceed with a public hearing under APA §§41 and 42.

After holding a public hearing the DEQ has 120 days to prepare a report and synopsis of comments and suggested changes for the ERRC to review. If that deadline is not met, the DEQ must withdraw the rules request. If the report is timely submitted to the ERRC, the ERRC has 120 days to review the DEQ’s report and either approve the proposed draft rules, approve them with modifications or reject them. Act §66(9).

If the ERRC approves the proposed draft rules (or does not act within 120 days), the ORR has 1 year from the last public hearing to transmit the rules, comments, any revisions and certificate of approval from the legislative services bureau and ORR to JCAR (Joint Committee on Administrative Rules). If the ERRC modifies the draft rules or rejects them, it must submit a notice of objection an explanation to the DEQ and the Governor. If the ERRC and DEQ resolve the issues, the rules are submitted to JCAR. If they cannot resolve the ERRC’s issues within 11 months from the last public hearing, the DEQ must submit a report to the Governor and if the Governor concurs with the DEQ, the rules are forward to JCAR, otherwise, the rules are withdrawn. Act §§66(10)-(12).

Concerns

While it is true that no law is perfect, this Act does have some deficiencies that could produce problems down the road. A few of these concerns are outlined below.

Composition of the voting members is seemingly skewed toward business interests. The ERRC will have 6 voting members representing the business sector. While there are 6 non business related voting members, the 6 business members will tend to favor business interests that may not align with environmental or public health protection. The composition could result in more frequent appointment of a chairperson and vice chairperson with business friendly interests. Also, it could result in deadlocked voting (in which case after 35 days the DEQ could hold public hearings under APA §§ 41 and 42), or, more likely than not, one of the non-business interest members (local government or general public) will align with the business sector votes to force the rules modification process, and possible review by the Governor. This risk is especially since one of the 5 criteria the ERRC must consider involves a balancing of the necessity of the rules in relation to the burdens placed on business. If the Governor sides with the business related voting members, there could be situations where rules to protect public health or the environment are either not promulgated or are less protective.[4]

Act §65(9) gives the Governor the ability to remove a member for cause, however, cause is not defined and this power is not subject to review. Could the Governor remove a member for extreme views on a subject or always voting a certain way? Because there is no review mechanism, this would likely end up being scrutinized in the court of common opinion.

The political affiliation limitation also presents unique issues. The Act prevents more than 6 members being from one political party. The first question is how will party affiliation policed? Voting rolls cannot be reviewed because those types of records are not kept so it would be based solely on a member’s word. However, what prevents a person from switching parties? Is an independent more likely to be business friendly or not? Will there be periodic reviews of party affiliation? Will ERRC members have to police this and call out any members who seem to be voting contrary to their self-declared party affiliation?

In addition to the foregoing, the ERRC is prohibited from conducting business if there is a vacancy in one of the voting member positions. If the Governor and/or Senate do not take action to fill that vacancy, the ERRC cannot consider any proposed rules. This arrangement could be abused to slow down and/or halt the rule promulgation process. There is a question as to whether section 66(7)(d) would apply (failure of the ERRC to make a determination within 35 days) so that the rules promulgation process could proceed forward unhindered.

Conclusion

The new environmental rules review committee was created with the intent to oversee an agency that was perceived by some as having a pro-environment/public health agenda. The question is whether there was an issue in the first place and, if so, does the new ERRC fix that or simply create another level of bureaucracy? Will this put an end to labeling DEQ rules as being “agenda” driven? Is the ERRC an overreaction that will end up turning rules making into a pitched partisan battle with one side asserting that the rules are too economically burdensome even though there is a public health threat or threat to the environmental that should be addressed? And if people are injured as a result of a rule not being promulgated due to economics, how is that really any different than what happened in Flint? These are questions that will end up being answered very soon as the DEQ attempts to move regulations relating to indoor air and polyfluoroakyl substances (”PFAS”) through the new environmental rules review committee.

[1] “Can Michigan’s polluters be trusted to self-regulate?” Detroit Free Press, December 19, 2017, accessed on August 30, 2018 at https://www.freep.com/story/news/local/michigan/2017/12/18/legislation-michigan-industries-rules-pollution/956636001/

[2] “Michigan LCV blasts lawmakers for passing ‘Fox Guarding the Henhouse Bills’”, accessed on August 30, 2018 at https://michiganlcv.org/news/michigan-lcv-blasts-lawmakers-for-passing-fox-guarding-the-henhouse-bills/

[3] The goal of the OPT is to work “with all state departments to establish a more effective system of customer service, performance measurement and regulatory and business practices.” Press Release “Gov. Rick Snyder issues executive order creating Office of Performance and Transformation”, February 2, 2016, accessed on August 30, 2018 at https://www.michigan.gov/snyder/0,4668,7-277-57577_57657-375344–,00.html

[4] In this instance, given what transpired with the Flint water crisis, there is a question as to whether the ERRC members or Governor could be held to account for ignoring evidence of the need to protect public health because of the cost to business.

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Major Changes to Michigan’s Permitting Appeal Process—Part 1

Editor — Wed, 05 Sep 2018 14:21:37 +0000

By Brian Considine.

On June 28 2018, Governor Snyder signed the Public Act 268 of 2018, which created a new Environmental Permit Review Commission and Environmental Review Panel.

Background

Prior to the Act, Michigan’s Administrative Procedures Act provided applicants and aggrieved parties an avenue to review Michigan Department of Environmental Quality (DEQ) permitting decisions through the contested case hearing process. Generally, an applicant or other party aggrieved by a permit issued (or denied) by the DEQ could administratively appeal the DEQ’s decision by filing a petition within 60 days of the DEQ’s denial or issuance of a permit.

However, the sponsors of the legislation believed there were inefficiencies, so they created new avenues for applicants, but not the public, to influence the permitting process.

Who Can Be on the Panel?

The Environmental Permit Review Commission created by the Act is comprised of 15 individuals appointed by the governor who are to advise the DEQ director on disputes related to permits and permit applications. In short, each member must either be an engineer, geologist, hydrologist, or hydrogeologist, or have a scientific background applicable to air or water, but cannot be a State employee or have certain contracts with the DEQ.

An Environmental Permit Panel is comprised of three Commission members and is convened only when the DEQ director determines that he or she cannot resolve a permit dispute with an applicant. The Panel members are selected by the director based on their relevant areas of expertise. The Panel then chooses a chairperson and two panelists constitute a quorum for official action.

The Governor recently appointed a number of individuals to be part of the Commission. The new Commissioner’s names and backgrounds can be accessed by clicking on this link.

New Permit Appeal Process

Unlike contested case proceedings where aggrieved parties, including adjacent landowners and other interested parties, may dispute the issuance of a permit, the new permit panel appeal process is limited to permit applicants only. If an applicant has a dispute with the DEQ prior to the issuance or denial of a permit and wants the issue reviewed, the applicant must submit a petition to the director that includes the issues in dispute, relevant facts and any data, analysis, opinion and documentation supporting the petitioner’s position. The director then has 45 days to try to resolve the issue with the petitioner and if the dispute is not resolved, the director convenes the Panel and provides the Panel with the petition and all other documentation. The Panel issues its recommendation (either adopting, modifying or reversing the DEQ) within 45 days of the hearing and the director has 60 days after receiving the Panel’s recommendation to issue a written decision. If the 60-day deadline is not met, the Panel’s recommendation is considered the director’s decision.

Notably, the director’s decision is not subject to review under the contested case proceedings of the APA or the Revised Judicature Act (“RJA”). Also, if an applicant fails to file a petition before the issuance or denial of a permit, the department’s decision regarding issuance or denial is final for purposes of review under the APA or the RJA.

While permits may still be appealed through the APA’s contested case provisions, Section 1317(1) of the Act has substantially changed current practice by making an Administrative Law Judge’s (“ALJ”) decision rendered during a contested case proceeding subject to review by a Panel. However, a review of a contested case proceeding is not limited to the applicant; any party to a contested case may seek review within 21 days of the final decision and order of the ALJ by submitting a petition to the director and notice to the ALJ. The Panel’s opinion must be in writing and clearly define the legal and technical principles being applied, which then becomes the final decision of the department and is subject to judicial review as provided under the APA. If the ALJ’s decision is not appealed to a Panel within 21 days, then the ALJ’s decision becomes the final decision and order of the DEQ for purposes of judicial review.

Stay tuned for part two discussing possible problems on the horizon. Do you have additional questions? Contact Brian Considine at bconsidine@dmms.com

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