May v. Must – The Scope of Agency Permitting Review under Statutory Standards
The Law Court recently issued a decision in Eastern Maine Conservation Initiative v. Board of Environmental Protection that contains an enlightening discussion of what an agency must consider—as opposed to what an agency may consider—in issuing a permit. In so doing, it adopted an important limit on how far agencies must go in reviewing a project’s downstream impacts.
The case involved an appeal of a permit issued by the Department of Environmental Protection for an aquaculture facility. The permit, upheld by the Board of Environmental Protection, authorized construction of the aquaculture facility under the state Site Location of Development Law (Site Law) and installation of intake and outfall pipes under the Natural Resources Protection Act (NRPA).
Opponents of the project argued that the agency erroneously failed to conduct an independent assessment under NRPA of the harm that the project would cause to wildlife habitats. NRPA specifies that certain enumerated activities require a permit, including construction and dredging. These proposed activities must then meet various standards, including that the activity will not “unreasonably harm” wildlife habitat. Petitioners did not challenge the agency’s assessment of the impacts of construction and dredging; instead, they argued that the agency should have analyzed the effects of effluent discharge—an activity that is not enumerated in NRPA—on wildlife habitat.
The Law Court rejected this argument based on the plain language of NRPA. The Court concluded that only enumerated “activities” trigger agency review in an application for a permit under NRPA. Because the discharge of treated wastewater is not an enumerated activity, the Court held that the agency did not err by declining to analyze the issue in approving the permit.
Most interestingly, the Law Court went on to distinguish one of the cases relied upon by the petitioners, Hannum v. Board of Environmental Protection. In that case, the Law Court had upheld a denial of a NRPA permit for installation of a pier and floating dock. The agency had concluded that the use of the dock—not just its construction—would disturb tern and seal colonies. The Court affirmed because it concluded that the Board has the power to deny a permit based on its proposed use. In Eastern Maine Conservation Initiative, the Court distinguished the case as follows:
To be clear, in Hannum we did not say that the agency is obligated under NRPA to consider the expected effects on wildlife of the intended use of a structure or facility. Rather, Hannum held that it was within the agency’s discretion to take those impacts into consideration in evaluating compliance with the standard in [NRPA].
In the Court’s view, then, Hannum establishes that (at least in certain circumstances) DEP may consider activities other than those enumerated in NRPA. As an aside, it may be reasonable to question the holding in Hannum—after all, if NRPA specifically identifies the relevant activities whose impacts must be considered, the expressio unius est exclusio alterius canon of statutory interpretation would seem to suggest that the agency may not go any further. Regardless, Eastern Maine Conservation Initiative makes clear that Hannum only goes so far—simply because it may consider certain unenumerated activities, the agency at the very least does not have to consider unenumerated activities that may follow from NRPA-regulated conduct (and which had separately been reviewed under a different statutory scheme). This is an important limitation on the required scope of agency review for environmental permits.
Thailand Launches Public Hearing on Draft Act to Promote Solar Power Usage
Recently, Thailand’s Department of Alternative Energy Development and Efficiency (“DEDE”) announced that they are to hold a public hearing on the draft Act on Promotion of Solar Power Usage (the “Draft Act”).
Key takeaways
Simplification of Regulatory Processes: The Draft Act aims to promote solar PV energy system installations by simplifying regulatory procedures, reducing unnecessary expenses and complex documentation.
Benefits for Commercial and Industrial Owners: The new law will benefit commercial and industrial building owners who install solar PV systems for self-consumption, as well as developers offering build-transfer-operate services as it streamlines the regulatory procedures.
Support for Sustainable Energy Goals: The Draft Act is designed to address rising electricity prices, reduce energy costs, cut fuel imports, improve access to clean energy, lower carbon dioxide emissions, and align with Thailand’s national strategy for sustainable growth.
Draft Act to Promote Solar Power Usage
As Thailand looks to reduce energy costs for both individuals and businesses, the Draft Act intends to cut down on the procedural steps required under current legislation, which can sometimes result in unnecessary expenses and complex docuentation. Recently, the government introduced a Ministerial Regulation that eliminates the need to obtain a factory license (commonly known as a Ror. Ngor. 4) from the authorities for all solar rooftop power generation installations located outside of industrial estates, regardless of their production capacity. In contrast, the Draft Act is not limited to just rooftop solar power facilities.
In line with Thailand’s aim to be carbon neutral by 2050, the government is emphasizing the growth of renewable energy, including solar power. Despite the progress, only 15 percent of Thailand’s energy currently comes from renewable sources, indicating that there is still significant room for improvement and investment throughout the country. Based on the draft Power Development Plan (PDP) 2024–2037 which is still yet to be fully finalized, renewable energy is expected to account for 51 percent of total electricity generation, with solar energy contributing 16 percent. This marks a strong increase in the share of clean energy sources in the electricity sector from 36 percent under the PDP 2018 (Revision 1) to 51 percent.
The Thai government’s increasing measures to expand renewable energy projects and harmonize various rules and regulations represent a positive step forward in Thailand’s journey to become carbon neutral. By proactively expanding renewable energy sources in its power mix, Thailand will continue to be an attractive destination for foreign direct investment.
Potential benefits to commercial and industrial building owners
The new law in its current form should benefit commercial and industrial building owners who wish to install solar PV systems for self-consumption. Additionally, it will benefit developers offering build-transfer-operate services (such as EPC and O&M models, rather than PPA models).
As Thailand aims to address the challenges of rising electricity prices, reduce energy costs, cut down on fuel imports, improve public access to clean energy, lower carbon dioxide emissions, and align with the national strategy for sustainable and eco-friendly growth, it is anticipated that the Draft Act will support the country in achieving these goals.
Overview of the Draft Act
The Draft Act consists of the following five sections:
Section 1: General provisions
Section 2: Installation of solar power systems
Section 3: Control and disposal of solar power systems
Section 4: Administrative duties
Section 5: Penalties
Please find below a brief overview of each section of the Draft Act.
Section 1: General provisions
Section 1 of the Draft Act outlines the general provisions, emphasizing the enhanced promotion of solar power system installations in a more efficient and streamlined manner.
Section 2: Installation of solar power systems
The Draft Act applies only to solar power system installations for self-consumption. However, it allows the sale of electricity to a governmental utility (i.e., the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, the Provincial Electricity Authority, or organizations designated by the Minister).
According to the Draft Act, if there is any sale, distribution, exchange, or provision of electricity, it must comply with the purchase rates and criteria announced by the Director-General and approved by the Minister.
It is important to note that, according to the intention of the Draft Act as announced by the DEDE in the hearing materials on 26 March 2025, all license requirements for installation of solar power systems, including an approval for grid synchronization, are exempted. However, the installer must notify the DEDE at least 30 days prior to the installation of the solar PV system.
Section 3: Control and disposal of solar power systems
To ensure the safe collection, disposal, or destruction of solar energy system equipment, such activities must follow the criteria set by the DEDE.
For businesses that are involved in the collection and/or disposal of solar energy equipment, they must be permitted by the Director-General of DEDE to carry out such activities. Further, licensed electronic waste disposal facilities are considered authorized establishments for solar energy system equipment disposal, and they must notify the Director-General and comply with the relevant criteria.
Section 4: Administrative duties
According to the Draft Act, officials have the relevant authority to access premises for inspecting the installation of solar energy systems to ensure that they are in compliance with the Draft Act. The primary objective is to ensure that the installation of solar energy systems is conducted safely and without any hazards.
Section 5: Penalties
Further, the Draft Act also details potential penalties for acts that violate the Draft Act.
Activities that do not comply with the provisions of the Draft Act can result in imprisonment of up to three years and/or fines up to THB 100,000.
Next steps
In conclusion, the Draft Act is structured into five sections: (1) general provisions; (2) installation of solar power systems; (3) control and disposal of solar power systems; (4) administrative duties; and (5) penalties.
It aims to promote efficient solar power installations, regulate the sale and distribution of electricity to the governmental utility, ensure safe disposal of solar equipment, empower officials to inspect installations for compliance, and impose penalties for violations, thereby supporting Thailand’s sustainable energy goals.
The Energy and Infrastructure team at Hunton will continue to monitor future developments to determine whether this law will expand to include or benefit developers who provide build-operate-transfer model (i.e., PPA model).
Jidapa Songthammanuphap and Joseph Willan contributed to this article
Changes to Long Island Development: Oversight Through Special Use Permits
Go-To Guide:
Special use permits are becoming more common for various developments across Long Island municipalities.
These permits allow certain uses in zoning districts, subject to additional standards or conditions.
The approval process typically involves public hearings and consideration of factors like traffic, environmental impact, and community compatibility.
Municipalities aim to balance development needs with community concerns through special use permits, but the process may be time-consuming for applicants.
Long Island municipalities have been revising their zoning ordinances to address evolving community needs, environmental considerations, and intelligent development, expanding the list of uses that require special use permits. This GT Advisory explains what a special use permit is, what it entails, and analyzes the potential implications of a special use permit on future development.
In the past year, the towns of Babylon, Huntington, and Smithtown have revised, or are considering revising, their respective zoning codes to incorporate or expand special use permit requirements.
Town of Babylon – The town board revised its code to require a special use permit for recreational marijuana dispensaries.
Town of Huntington – In the Melville Town Center overlay, the town board adopted amendments to its zoning code to require a special use permit for mixed-use buildings, breweries, wineries, and similar uses. Huntington is also considering requiring a special use permit for certain warehouse uses in industrially zoned properties.
Town of Smithtown – Officials are considering amending the zoning code to require a special use permit for rail transfer stations and rail freight terminals.
A special use permit (also known as a “special permit,” “special exception,” or “conditional use permit”) is a land use approval for a use that is generally considered to be permitted in the respective zoning district subject to compliance with additional standards or conditions. The special use permit differs from a variance in that “[a] variance is an authority to a property owner to use property in a manner forbidden by the ordinance while a special [use permit] allows the property owner to put his property to a use expressly permitted by the ordinance.” North Shore Steak House, Inc. v. Board of Appeals of the Inc. Village of Thomaston, 30 N.Y.2d 238, 331 N.Y.S.2d 645 (1972). Simply put, a special use permit is an “as of right” use subject to additional conditions that ensure compatibility with the character of the surrounding community.
Throughout Long Island, special use permits are often required for religious or educational uses within a residential zone, drive-through establishments, and active recreational uses. Municipalities favor special use permits because they require a public hearing where the deciding board can ensure that the application conforms to the required standards or conditions. These standards or conditions are set forth in the local zoning ordinance and vary from municipality to municipality, but often center around traffic and parking impacts, conformity with the municipality’s comprehensive plan, environmental effects, and pedestrian safety. This provides the municipality flexibility by allowing the deciding board to consider each application on a case-by-case basis.
Oftentimes, the deciding board may waive the conditions of the special use permit. Where the board deciding the special use permit is the local planning or zoning board, under the New York State Town Law and Village Law, the governing board (typically the town board or village board of trustees) may authorize the board to waive approval conditions. As long as the board has the authority to do so, it may waive conditions if it determines the conditions, as they apply to the specific application, are not in the interest of the public health, safety, or general welfare, or inapplicable to the requested use. To make this determination, boards will often consider the application’s consistency with the local zoning code, the comprehensive plan, compatibility with surrounding uses, precedent, fairness, and – often most importantly – public input.
Regardless of whether the board decides to grant or deny the special use permit application, the decision must be based upon substantial evidence in the written record. North Shore Steak House, 30 N.Y.2d at 245. Generalized community objections, community pressure, and speculation cannot be the sole basis for denial of a special use permit. Instead, the written record must support that the special use permit’s specific negative impacts will exceed similar as-of-right uses. Robert Lee Realty Co. v. Village of Spring Valley, 61 N.Y.2d 892, 474 N.Y.S.2d 475 (1984).
Municipalities throughout Long Island face challenges as they increase reliance on special use permits. The special use permit application process requires significant time and resources – including traffic studies, civil and architectural plans, and environmental review under the State Environmental Quality Review Act. Some applicants may grow impatient and choose to abandon projects that might have economic and community benefits to the locality. As such, the reviewing agency should have the resources to ensure a speedy review so that the applicant can secure a public hearing.
Special use permits likely will remain a central land use regulation in Long Island’s future. The regulation generally provides a tool to allow municipalities to promote sustainable development and ensure compatibility with the comprehensive plan. However, municipalities should work with applicants and residents to navigate the challenges and opportunities discussed in this GT Advisory.
Key Legal Issues Facing U.S. Government Contractors in 2025
As the regulatory environment continues to evolve in the new administration, U.S. government contractors are facing an increasingly complex array of legal challenges. Staying compliant and competitive requires close attention to several ongoing legal issues in addition to emerging ones:
1. Cybersecurity Compliance and CMMC Implementation
Cybersecurity remains a top priority for federal agencies, and the rollout of the Cybersecurity Maturity Model Certification (CMMC) 2.0 framework has brought new compliance expectations. Contractors must ensure that their information systems meet required security standards, or risk disqualification from Department of Defense (DoD) contracts. The phased implementation schedule means that affected contractors should act now to assess readiness and begin remediation efforts.
2. False Claims Act (FCA) Enforcement
The Department of Justice continues to actively pursue FCA cases, particularly in areas like procurement fraud, mischarging, and non-compliance with contract terms. Moreover, consistent with DOGE’s stated mandate of combatting fraud in federal contracting and grants, the Trump administration is likely to place additional emphasis on this tool. Contractors should invest in robust internal compliance programs and training to mitigate risks of whistleblower complaints and audits.
3. Supply Chain and Buy American Act Scrutiny
Recent executive orders and proposed regulations are reinforcing domestic sourcing requirements. Contractors must carefully assess their supply chains to ensure compliance with Buy American Act and Trade Agreements Act rules. Non-compliance could lead to severe adverse consequences, such as contract termination or debarment.
4. Labor and Employment Mandates
Despite changes in emphasis from the new administration, government contractors are still subject to a variety of federal labor requirements, including those related to minimum wage, paid leave, and workplace safety. With recent changes from the Department of Labor – such as updates to prevailing wage rules under the Davis-Bacon Act – contractors must remain agile in adapting to new mandates.
5. ESG and DEI Reporting Requirements
Environmental, social, and governance (ESG) initiatives are becoming increasingly important in federal procurement. Contractors may soon face new disclosure obligations related to sustainability and diversity, equity, and inclusion (DEI) practices. Proactively developing transparent ESG and DEI strategies can offer a competitive edge.
6. Bid Protests and Procurement Integrity
With increased competition for contracts, bid protests are becoming more common. Understanding protest procedures, debriefing and intervention rights, and ethical boundaries in the procurement process is crucial to protecting your interests and reputation.
Conclusion
The legal terrain for government contractors is shifting rapidly. A proactive approach to compliance, risk management, and strategic planning is essential for long-term success in this high-stakes sector.
Final Approval for Simplification – Council of the European Union Formally Approves to “Stop-the-Clock” on Sustainability Reporting and Diligence Requirements
On 14 April 2025, the Council of the European Union (the “Council”) has given the greenlight for the “Stop-the-clock” proposal, which will postpone the application of sustainability reporting and diligence requirements. This marks the final approval for delaying the application of the Corporate Sustainability Reporting Directive (“CSRD”) and Corporate Sustainability Due Diligence Directive (“CSDDD”). For further details on the key aspects of this delay please see our alert here.
The approved delay forms part of the Omnibus package to simplify the European legislation in the field of sustainability. The focus will now shift to the second stage of the Omnibus package: simplifying the substantive reporting obligations under the CSRD. To support this, the European Commission has mandated the EFRAG Sustainability Reporting Board (“EFRAG SRB“) to provide technical advice. EFRAG SRB is expected to inform the European Commission of its internal timeline for simplifying the European Sustainability Reporting Standards (“ESRS“) on 15 April 2025.
Next Steps
The legislation underlying the “Stop-the-clock” proposal is a European directive. It will be published in the EU’s Official Journal and will enter into force the day following the publication. EU Member States must transpose this directive into their national legislation by 31 December 2025.
New Mexico Will Phase Out Products Containing Intentionally Added PFAS and Require Reporting; Exemptions Include Fluoropolymers
On April 8, 2025, New Mexico Governor Michelle Lujan Grisham (D) signed the Per- and Poly-Fluoroalkyl Substances (PFAS) Protection Act (HB 212). Like Minnesota and Maine, New Mexico will begin phasing out certain consumer products containing intentionally added PFAS, defining PFAS as “a substance in a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.” In 2032, New Mexico will prohibit products containing intentionally added PFAS unless the use of the PFAS is designated as a currently unavoidable use (CUU). Similar to Minnesota, New Mexico will also require manufacturers of products containing intentionally added PFAS to report certain information. New Mexico will exempt several products, however, from both the prohibition and reporting requirements. Most notably, the exemptions include products containing certain fluoropolymers.
Prohibited Products
In New Mexico, beginning January 1, 2027, a manufacturer may not sell, offer for sale, distribute, or distribute for sale the following products containing intentionally added PFAS:
Cookware;
Food packaging;
Dental floss;
Juvenile products; and
Firefighting foam.
Beginning January 1, 2028, New Mexico will prohibit manufacturers from selling, offering for sale, distributing, or distributing for sale the following products containing intentionally added PFAS:
Carpets or rugs;
Cleaning products;
Cosmetics;
Fabric treatments;
Feminine hygiene products;
Textiles;
Textile furnishings;
Ski wax; and
Upholstered furniture.
Beginning January 1, 2032, products containing intentionally added PFAS that are not exempt under New Mexico’s statute will be banned unless the use of the PFAS is determined to be a currently unavoidable use (CUU).
The products that New Mexico will prohibit are similar to the products that Minnesota and Maine have already prohibited or will be prohibiting. On January 1, 2025, Minnesota prohibited intentionally added PFAS in carpets or rugs, cleaning products, cookware, cosmetics, dental floss, fabric treatments, juvenile products, menstruation products, textile furnishings, ski wax, and upholstered furniture. As of January 1, 2025, Maine prohibits intentionally added PFAS in carpets or rugs, fabric treatments, and fabric treatments that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2026, Maine will prohibit intentionally added PFAS in cleaning products, cookware, cosmetics, dental floss, juvenile products, menstruation products, textile articles (with exception), ski wax, upholstered furniture, and products listed that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2029, Maine will prohibit intentionally added PFAS in artificial turf and outdoor apparel for severe wet conditions unless accompanied with a disclosure: “Made with PFAS chemicals.” Both Minnesota and Maine will prohibit products containing intentionally added PFAS beginning January 1, 2032, unless the use is a CUU, and Maine will prohibit products that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. As amended last year, Maine will prohibit intentionally added PFAS in cooling, heating, ventilation, air conditioning, and refrigeration equipment, as well as in refrigerants, foams, and aerosol propellants as of January 1, 2040.
Reporting Requirements
On or before January 1, 2027, New Mexico will require manufacturers of products containing intentionally added PFAS to report certain information, including:
A brief description of the product, including a universal product code (UPC), stock keeping unit (SKU), or other numeric code assigned to the product;
The purpose for which the PFAS is used in the product;
The amount of each PFAS in the product, identified by its Chemical Abstracts Service Registry Number® (CAS RN®) and reported as an exact quantity determined using commercially available analytical methods or as falling within a range approved for reporting purposes by the New Mexico Environment Department (NMED);
The name and address of the manufacturer and the name, address, and phone number of a contact person for the manufacturer; and
Any additional information requested by NMED as necessary.
NMED may grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may enter into an agreement with one or more states to collect information and may accept information from a shared system as meeting the information requirements.
As reported in our June 14, 2023, blog item, Minnesota will require manufacturers of products containing intentionally added PFAS to submit similar information on or before January 1, 2026. According to the Minnesota Pollution Control Agency (MPCA), it is working with the Interstate Chemicals Clearinghouse (IC2) to modify its High Priority Chemicals Data System (HPCDS) database as the reporting platform for its requirement. Maine had a similar reporting requirement in the statute enacted in 2021, but the governor signed a bill in April 2024 amending the statute so that the reporting requirement applies only to products that receive a CUU determination. More information on the 2024 amendments to Maine’s statute are available in our May 24, 2024, blog item.
Exemptions
New Mexico exempts several products from both the prohibition and reporting requirement. As stated earlier, Maine amended its reporting requirement to apply only to products with a CUU determination. Maine’s 2024 amendments included the addition of several exemptions to the statute as noted below. Minnesota’s statute has fewer exemptions, which are also noted below. The exemptions in New Mexico include:
A product for which federal law governs the presence of a PFAS in the product in a manner that preempts state authority (Maine);
Used products offered for sale or resale (Maine, Minnesota);
Medical devices or drugs and the packaging of the medical devices or drugs that are regulated by the U.S. Food and Drug Administration (FDA), including prosthetic and orthotic devices (Maine, Minnesota (reporting will still be required));
Cooling, heating, ventilation, air conditioning, or refrigeration equipment that contains intentionally added PFAS or refrigerants listed as acceptable, acceptable subject to use conditions, or acceptable to narrowed use limits by the U.S. Environmental Protection Agency (EPA) pursuant to the Significant New Alternatives Policy (SNAP) Program, 40 C.F.R. Part 82, Subpart G and sold, offered for sale, or distributed for sale for the use for which the refrigerant is listed pursuant to that program (Maine will prohibit these products on January 1, 2040);
A veterinary product and its packaging intended for use in or on animals, including diagnostic equipment or test kits and the veterinary product’s components and any product that is a veterinary medical device, drug, biologic, or parasiticide or that is otherwise used in a veterinary medical setting or in veterinary medical applications that are regulated by or under the jurisdiction of:
FDA;
The U.S. Department of Agriculture (USDA) pursuant to the federal Virus-Serum-Toxin Act; or
EPA pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), except that any such products approved by EPA pursuant to that law for aerial and land application are not exempt from this section (Maine);
A product developed or manufactured for the purpose of public health or environmental or water quality testing (Maine);
A motor vehicle or motor vehicle equipment regulated under a federal motor vehicle safety standard, as defined in 49 U.S.C. Section 30102(a)(10), except that the exemption does not apply to any textile article or refrigerant that is included in or as a component part of such products (Maine);
Any other motor vehicle, including an off-highway vehicle or a specialty motor vehicle, such as an all-terrain vehicle, a side-by-side vehicle, farm equipment, or a personal assistive mobility device (Maine);
A watercraft, an aircraft, a lighter-than-air aircraft or a seaplane (Maine);
A semiconductor, including semiconductors incorporated in electronic equipment, and materials used in the manufacture of semiconductors (Maine);
Non-consumer electronics and non-consumer laboratory equipment not ordinarily used for personal, family, or household purposes (Maine);
A product that contains intentionally added PFAS with uses that are currently listed as acceptable, acceptable subject to use conditions, or acceptable subject to narrowed use limits in EPA’s rules under the SNAP Program; provided that the product contains PFAS that are being used as substitutes for ozone-depleting substances under the conditions specified in the rules;
A product used for the generation, distribution, or storage of electricity;
Equipment directly used in the manufacture or development of the products listed above;
A product for which the NMED Environmental Improvement Board (EIB) has adopted a rule providing that the use of PFAS in that product is a CUU; or
A product that contains fluoropolymers consisting of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.
Testing Required and Certificate of Compliance
If NMED has reason to believe that a product containing an intentionally added PFAS is being sold, offered for sale, distributed, or distributed for sale, it may direct the manufacturer to provide it with testing results within 30 days that demonstrate the amount of each PFAS in the product, identified by its CAS RN and reported as an exact quantity or as falling within a range approved for reporting. If testing demonstrates that the product does not contain intentionally added PFAS, the manufacturer will provide NMED with a certificate of compliance attesting that the product does not contain an intentionally added PFAS, the testing results, and any other relevant information.
Minnesota has similar provisions regarding testing and certificates of compliance. The Maine Department of Environmental Protection (MDEP) may direct the manufacturer to provide within 30 days a certificate attesting that the product does not contain intentionally added PFAS.
Commentary
Although the requirements enacted by New Mexico, Maine, and Minnesota are similar, there are some key differences. Most of the products exempted in 2024 from Maine’s prohibitions are included in New Mexico’s statute, as well as a provision exempting fluoropolymers that “consist[] of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.” Bergeson & Campbell, P.C. (B&C) agrees that fluoropolymers should be distinguished from the broad class of PFAS. The exemption here may lead, however, to future litigation or amendment. The enacted definition includes the fluoropolymer polytetrafluoroethylene (PTFE), better known as TeflonTM. While New Mexico will ban cookware containing intentionally added PFAS, the best known example — Teflon-coated frying pans — will be exempt from both the prohibition and reporting requirements. Non-governmental organizations (NGO) may argue that legislatures lacking a chemical background did not appreciate that the exemption would extend to Teflon-coated cookware, while manufacturers will maintain the safety of fluoropolymers. The inclusion of the exemption is scientifically grounded and reflects the entirely sensible view that products posing no risk should not be banned. Other states are expected to follow New Mexico’s lead.
Each state varies in what reporting will be necessary. Maine dropped its broad reporting requirement and will require reporting only for products with a CUU determination. Minnesota will require reporting for all products, including those otherwise exempt from the prohibition requirements, including medical devices. New Mexico will require reporting only for products that do not have an exemption (thus excluding products that have a CUU determination and medical devices). Minnesota and New Mexico will require similar information, and with Minnesota’s reporting currently due on or before January 1, 2026, it may be that reporting to New Mexico will not be necessary since the enacted law allows NMED to grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may also accept information from a shared system as meeting the information requirements.
The testing envisioned by New Mexico and Minnesota that can demonstrate the amount of each PFAS in the product, identified by CAS RN and reported as an exact quantity or as falling within an approved range, all within 30 days, is beyond the current technical capabilities. With thousands of substances meeting the states’ definition of PFAS as “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom,” it is not yet possible to run a single test and determine the specific PFAS in a particular product. To date, the current test used, total organic fluorine (TOF), measures only the total amount of fluorine in a sample that is bound to organic compounds.
Since enacting its statute in 2021, Maine has amended it several times, and there are currently several bills in the Minnesota legislature that would amend its law. As reported in our April 11, 2025, blog item, the Maine Board of Environmental Protection (MBEP) approved MDEP’s December 2024 proposed rule regarding PFAS products during its April 7, 2025, meeting. Under the approved rule, CUU requests for products scheduled to be prohibited January 1, 2026, in Maine are due June 1, 2025. Although Minnesota requested comments in November 2024 on its planned PFAS in products reporting and fee rule, it has yet to issue a proposed rule, despite the rapidly approaching January 1, 2026, deadline. The state regulatory landscape remains fluid, and stakeholders are advised to stay tuned.
Maine Board Approves Motion to Adopt Rule on PFAS in Products; CUU Proposals for Products Prohibited as of January 1, 2026, Are Due June 1, 2025
As reported in our April 1, 2025, blog item, the Maine Board of Environmental Protection (MBEP) was scheduled to consider the Maine Department of Environmental Protection’s (MDEP) December 2024 proposed rule regarding products containing per- and polyfluoroalkyl substances (PFAS) during its April 7, 2025, meeting. As reported in our December 31, 2024, memorandum, on December 20, 2024, MDEP published a proposed rule that would establish criteria for currently unavoidable uses (CUU) of intentionally added PFAS in products and implement sales prohibitions and notification requirements for products containing intentionally added PFAS but determined to be a CUU. During the April 7, 2025, meeting, MBEP unanimously approved a motion to adopt the Chapter 90 rule, the Chapter 90 basis statement, and MDEP’s response to comments “as presented and with correction of minor typographical errors, and the addition of ‘Maine Department of Transportation’ at section 4(A)(8),” according to MBEP’s draft meeting minutes. Two MBEP members were absent.
Under the approved rule, CUU requests for products scheduled to be prohibited January 1, 2026, are due June 1, 2025. The products containing intentionally added PFAS that are scheduled to be prohibited include:
Cleaning products;
Cookware;
Cosmetics;
Dental floss;
Juvenile products;
Menstruation products;
Textile articles. The prohibition does not include:
Outdoor apparel for severe wet conditions; or
A textile article that is included in or a component part of a watercraft, aircraft or motor vehicle, including an off-highway vehicle;
Ski wax; or
Upholstered furniture.
The January 1, 2026, prohibition applies to any of the products listed that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or container that otherwise contains intentionally added PFAS.
Proposals for CUU determinations may be submitted by manufacturers individually or collectively. Under the rule, a separate proposal must be submitted for each individual combination of product category and the associated industrial sector. Proposals must include details of any sales prohibition to which the product is subject because of the intentionally added PFAS. As of January 1, 2025, Minnesota prohibited intentionally added PFAS in an almost identical list of products, with the exception of textile articles (Minnesota has banned textile furnishings containing intentionally added PFAS). A CUU proposal in Maine is still possible, but submitters will need to explain how products available in compliance with Minnesota’s prohibition are not reasonably available alternatives in Maine.
REACH and GHS in Latin America — A Conversation with Melissa Owen [PODCAST]
This week I had the pleasure of speaking with Melissa Owen, attorney/owner of Ambiente Legal, about the significant regulatory developments regarding chemical registration in Latin America, including Latin American Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) initiatives and the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). We discuss Brazil REACH, which requires by law the government to have an implementing regulation issued by May 2025, Colombia REACH, also subject to a fast-approaching May 2025 deadline, and other Latin American REACH and GHS deadlines. We also discuss the August 2025 deadline in Chile for the notification of chemicals included in professional and consumer products, and much more regarding developments in countries south of our border.
State Climate Disclosure Bills – A Growing Trend?
With the uncertainty plaguing the ultimate status of the SEC’s climate disclosure rules on the federal level (we reported on the most recent developments in The SEC Votes to “End its Defense” of Climate Change Rules and SEC Asks Court to Put Climate Change Litigation on Hold), a number of U.S. states have continued to take up the mantle to mandate the disclosure of climate emissions from both public and private enterprises.
California was the first state to pass climate disclosure laws (discussed in previous client alerts – California – First State to Enact Climate Reporting Legislation and California Climate Disclosure Laws – New Developments, Old Timelines) and several states have since proposed similar bills requiring large business entities to disclose their greenhouse gas (GHG) emissions, the highlights of which are summarized below.
However, on April 8, 2025, President Trump issued an Executive Order directing the U.S. Attorney General to identify and stop the enforcement of all state laws, regulations, policies and practices “that are or may be unconstitutional, preempted by Federal law, or otherwise unenforceable,” with a focus on prioritizing any such state laws purporting to address “climate change” or involving “greenhouse gas.”
While it remains unclear whether any of the proposed state bills will pass into law in their current form, or at all, or if enacted, how they will be treated by the current Administration, the trend is noteworthy, and the regulated community should keep informed regarding the status of the proposed state bills.
I. New York
1. Senate Bill 3456 ‑ The Climate Corporate Data Accountability Act[1]
Initially introduced in 2023 and reintroduced in the New York Senate in January 2025 as S3456, the Climate Corporate Data Accountability Act mandates reporting by entities meeting the following criteria:
U.S.‑formed entities;
Doing business in the State of New York and deriving receipts from activity in the State;[2] and
Having revenues in the preceding fiscal year exceeding $1 billion, including revenues received by all of the business entity’s subsidiaries that do business in the State.
Reporting entities would be required to disclose their Scope 1, 2 and 3 GHG emissions annually to an emissions reporting organization. The disclosure timing differs from the California law in that disclosure on a reporting entity’s Scope 1 and 2 emissions would be required a year later, beginning in 2027 (for 2026 data), and on Scope 3 emissions beginning in 2028 (instead of 2027). As in California, GHG emissions would need to be measured and reported using the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development (the GHG Protocol).
The New York State Department of Environmental Conservation would be required to adopt implementing regulations by the end of 2026.
The Senate Environmental Conservation Committee recently voted unanimously in favor of the bill which is now pending in the Senate Finance Committee.
2. Senate Bill 3697 – Climate‑Related Financial Risk Reporting[3]
Introduced in January 2025, this bill is modeled on California’s Climate‑Related Financial Risk Reporting law (SB 261). The New York bill would require business entities formed under U.S. law with total annual revenues exceeding $500 million in its prior fiscal year and that do business in New York to prepare a climate‑related financial risk report disclosing, on its website, by January 1, 2028 and biennially thereafter: (i) its climate‑related financial risk, in accordance with the Task Force on Climate‑Related Financial Disclosures framework or an equivalent reporting requirement; and (ii) the measures it adopted to reduce and adapt to the disclosed climate‑related financial risk.
As in California, reports could be consolidated at the parent entity level. Administrative penalties for non‑disclosure or for inadequate disclosure could be imposed up to a cap of $50K per reporting year.
The bill is currently with the Senate Environmental Conservation Committee.
The NY bills overlap with California’s climate disclosure laws (SB 253 and SB 261) and, if adopted as drafted, should not impose material additional obligations on entities already subject to the California laws.
II. New Jersey – Senate Bill 4117[4]
S4117 (the “Climate Corporate Data Accountability Act”) was introduced in 2025. The bill would require businesses operating in New Jersey with an annual revenue exceeding $1 billion to provide a report on their GHG emissions to the Department of Environmental Protection (DEP) and a nonprofit organization selected by the DEP annually, commencing three years after the bill’s enactment; publicly disclose their Scope 1 and Scope 2 GHG emissions commencing four years after the bill’s enactment; and publicly disclose their Scope 3 GHG emissions five years after the bill’s enactment. As in California, GHG emissions would need to be measured and reported using the GHG Protocol.
Importantly, to ease compliance, the bill expressly would allow reporting entities to use reports they provide to the California state government under California’s “Climate Corporate Data Accountability Act” (SB 253) to satisfy the provisions of the New York bill. Business entities that violate the bill’s provisions would be liable for civil administrative penalties of up to $10,000 for the first offense, $20,000 for the second offense and $50,000 for the third and each subsequent offense. A reporting entity could also be liable for civil penalties of up to $10,000 per day of violation.
The bill is currently pending in the Senate Budget and Appropriations Committee.
III. Illinois House Bill 3673[5]
Introduced in the Illinois House in 2025, HB673 (the “Climate Corporate Accountability Act”) would require U.S. business entities doing business in the state of Illinois, with revenues exceeding $1 billion, to annually disclose their Scope 1, 2 and 3 GHG emissions. These public reporting requirements would commence on January 1, 2027 for Scope 1 and 2 emissions and no later than 180 days thereafter for Scope 3 emissions. The Secretary of State would be required to develop and adopt relevant rulemaking before July 1, 2026. As in California, the emissions would need to be calculated using the GHG Protocol.
The bill references the Attorney General’s right to bring a civil action to seek civil penalties but does not contain any specific penalties for non‑compliance.
The bill is currently pending in the House Rules Committee.
IV. Washington – Senate Bill 6092[6]
E2SSB 6092 was introduced in the Washington Senate in 2024. This bill initially required business entities with over $1 billion in annual revenue and doing business in Washington to report Scope 1, 2 and 3 GHG emissions. However, the bill was later substituted to instead direct the Washington Department of Ecology to develop policy recommendations to address climate‑related disclosure requirements in the State.
The Washington Senate passed the bill in February 2024 and the bill is currently with the House.
V. Colorado – House Bill 25‑1119[7]
Introduced in January 2025, HB25‑1119 would require entities doing business in Colorado and having total revenues exceeding $1 billion to disclose annually their Scope 1 and 2 emissions beginning in 2028, and certain Scope 3 emissions by 2029, with a phased‑in approach in subsequent years based on the source of those Scope 3 emissions.[8]
Interestingly, HB25‑1119 includes a freedom of speech exception noting that reporting entities would not be required to disclose any information in violation of their freedom of speech, including any freedom from compelled speech, guaranteed by the First Amendment to the U.S. Constitution or the Colorado State Constitution.
However, this bill has been postponed indefinitely by the House Committee on Energy & Environment.
* * *
The intent of the state bills on climate disclosure is in line with the global trend toward mandated climate reporting, although the specifics of what needs to be disclosed, by whom and when, continue to evolve both domestically and globally. For example, the timing for certain required climate‑related disclosures in the European Union has recently been delayed, as reported in our client alerts (A Step Closer to CSRD’s Non‑EU Group Reporting Standards and Momentum on Voting on the Omnibus Delay and Updating Corporate Sustainability Reporting Requirements), while President Trump’s recent Executive Order calls into question the viability of U.S. state climate disclosure laws.
We will continue to update you on climate disclosure legislative developments on the state, federal and international fronts.
[1] https://legislation.nysenate.gov/pdf/bills/2025/S3456
[2] Within the meaning of Section 209 of the New York Tax Law.
[3] https://legislation.nysenate.gov/pdf/bills/2025/S3697
[4] https://legiscan.com/NJ/text/S4117/2024
[5] https://www.ilga.gov/legislation/104/HB/PDF/10400HB3673lv.pdf
[6] https://lawfilesext.leg.wa.gov/biennium/2023‑24/Pdf/Bills/Senate%20Bills/6092‑S2.E.pdf?q=20250331132001
[7] https://leg.colorado.gov/sites/default/files/documents/2025A/bills/2025a_1119_01.pdf
[8] Scope 3 emissions from purchased goods and services, capital goods and the use of sold products would need to be reported by January 1, 2029; from fuel and energy activities (not already classified as Scope 1 or 2 emissions), waste generated in operations, processing of sold products and end‑of‑life of sold products by January 1, 2030; and upstream and downstream transportation and distribution, business travel, employee commuting, upstream leased assets and franchises by January 1, 2031.
The Clock is Ticking for Republicans to Use the Congressional Review Act
Congress has approximately one month to use the Congressional Review Act (CRA) to undo qualifying Biden Administration-issued regulations. According to an updated analysis by Bloomberg Government, the estimated period to expedite repeal of Biden Administration rules ends May 8, 2025. This gives Congress approximately four weeks to act on the dozens of pending CRA bills.
President Trump’s focus on overturning Biden Administration regulations through the CRA has taken a back seat of late to other issues. Attention has turned to tariffs and congressional Republicans’ efforts to reach agreement on a budget framework. Focus is especially needed on developing a framework as it will lay the foundation for consideration of other Trump priorities, including extending the 2017 tax cuts. It will take weeks, if not months, to develop budget reconciliation legislation. With the just-announced 90-day pause in implementing most tariffs, the most immediate Trump priority now remaining is using the CRA to repeal Biden Administration rules deemed overly burdensome, and the deadline of May 8, 2025, will be upon us soon. (Details about how the CRA works can be found in our February 27, 2025, blog post.)
To date, only two resolutions of disapproval have been enacted in the 119th Congress:
H. J. Res. 35 — This joint resolution nullifies the Environmental Protection Agency (EPA) rule titled Waste Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting and Exemptions and published on November 18, 2024. The rule outlines compliance requirements under the Methane Emissions Reduction Program. Under the program, the EPA collects an annual charge on emissions of methane and other greenhouse gases from the oil and gas sector if the emissions exceed specified waste emissions thresholds.
S. J. Res 11 — This joint resolution nullifies the final rule issued by the Bureau of Ocean Energy Management (BOEM) titled Protection of Marine Archaeological Resources and published on September 3, 2024. The rule requires operators and lessees conducting oil and gas exploration or development on the Outer Continental Shelf and that are seeking BOEM approval for such activities to also provide BOEM with an archaeological report for the area of potential effects. The report must identify potential archaeological resources (material remains of human life or activities that are at least 50 years old and that are of archaeological interest) on the sea floor. The rule modified regulations that only required such a report when a BOEM regional director has reason to believe that an archaeological resource may be present in the lease area.
Two more resolutions of disapproval have been passed by both the Senate and House of Representatives and await signature by President Trump:
H. J. Res 24 — This joint resolution nullifies the rule titled Energy Conservation Program: Energy Conservation Standards for Walk-In Coolers and Walk-In Freezers and submitted by the Department of Energy (DOE) on December 23, 2024. Under the rule, DOE adopted amended energy conservation standards for walk-in coolers and freezers to achieve the maximum improvement in energy efficiency that DOE determined was technologically feasible and economically justified.
H. J. Res. 25— This joint resolution nullifies the rule titled Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales and issued by the Internal Revenue Service (IRS) on December 30, 2024. The rule generally requires persons effectuating decentralized financial (DeFi) transactions to report certain information regarding digital asset sales to the IRS.
At least six other resolutions of disapproval have been passed by either the Senate or House of Representatives. Four of the six resolutions of disapproval, summarized below, address regulations promulgated by EPA and DOE (the remaining two address regulations by the Consumer Financial Protection Bureau):
H. J. Res. 61 — This joint resolution nullifies the Environmental Protection Agency rule titled National Emission Standards for Hazardous Air Pollutants: Rubber Tire Manufacturing (89 Fed. Reg. 94886) and published on November 29, 2024. The rule addresses the decision in Louisiana Environmental Action Network v. EPA (D.C. Cir. 2020) by implementing emissions standards for the rubber processing subcategory of the rubber tire manufacturing industry to ensure all emissions of hazardous air pollutants from sources in the source category are regulated.
H. J. Res. 20 — This joint resolution nullifies the rule titled Energy Conservation Program: Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters and submitted by the Department of Energy (DOE) on December 26, 2024. Under the rule, DOE adopted amended energy conservation standards for gas-fired instantaneous water heaters to achieve the maximum improvement in energy efficiency that DOE determined was technologically feasible and economically justified.
H. J. Res. 42 — This joint resolution nullifies the Energy Conservation Program for Appliance Standards: Certification Requirements, Labeling Requirements, and Enforcement Provisions for Certain Consumer Products and Commercial Equipment rule published by the Department of Energy (DOE) on October 9, 2024. Under the rule, DOE modified its regulations on the energy efficiency of certain types of consumer products (e.g., washing machines and dishwashers) and industrial equipment (e.g., computer room air conditioners). Specifically, it modified certification requirements, labeling requirements, and enforcement provisions for these products and equipment to (1) align reporting requirements with currently applicable energy conservation standards and test procedures, and (2) provide DOE with the information necessary to determine the appropriate classification of products for the application of standards.
H. J. Res. 75 — This joint resolution nullifies the final rule issued by the Department of Energy’s Office of Energy Efficiency and Renewable Energy titled Energy Conservation Program: Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers and published on January 21, 2025. Under the rule, the office adopted new and amended energy conservation standards for commercial refrigeration equipment in order to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified.
With Congress scheduled to take a two-week recess beginning April 11, 2025, Congress will have approximately two weeks to address remaining resolutions of disapproval under an expedited process that requires only a majority vote. With Democrats unlikely to support Republican efforts to overturn regulations from a Democratic administration, the deadline for Republicans to act is essentially the deadline for expedited action under the CRA.
Given the remaining time and considering other issues that will demand congressional attention in the coming month, congressional Republicans will be challenged to equal the mark of 16 successful CRA actions in President Trump’s first term.
As noted in our February 27, 2025, blog post, at least 16 resolutions of disapproval that have been introduced address rules promulgated by EPA. Four of these relate to the Toxic Substances Control Act (TSCA), including three (essentially the same) regarding trichloroethylene (TCE). The other resolution of disapproval is regarding decabromodiphenyl ether (decaBDE) and phenol, isopropylated phosphate (3:1) (PIP 3:1), “Revision to the Regulation of Persistent, Bioaccumulative, and Toxic Chemicals Under the Toxic Substances Control Act (TSCA)” (89 Fed. Reg. 91486. As there will be limited time for Congress to act, and with other, more easily explained resolutions of disapproval available, these TSCA-related resolutions of disapproval will face an uphill battle to be considered, let alone enacted, in the limited time remaining.
Executive Order Seeks to Reinvigorate Domestic Coal Production
On April 8, 2025, President Trump signed an executive order titled Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241, which builds on the March 20 Executive Order titled Immediate Measures to Increase American Mineral Production (Executive Order 14241) and complements two other executive orders issued on April 8 focused on strengthening the US electric grid and protecting American energy from state overreach. The coal order provides for immediate action to remove restrictions on coal leasing, mining, and exporting and outlines initiatives to extend coal-power infrastructure and support coal technologies. This order is part of the administration’s holistic strategy to promote coal production in order to support domestic job creation, provide reliable energy supply for resurgent electricity demand from emerging technologies, lower energy costs, capitalize on vast US coal reserves, and facilitate coal exports. The order includes the following initiatives and mandates:
Designation of coal as a “mineral” under Executive Order 14241 and as a “critical mineral”: The order directs the Chair of the National Energy Dominance Council (NEDC) to designate coal as a “mineral” under Executive Order 14241, enabling coal and coal projects to qualify for the benefits under Executive Order 14241, including streamlined permitting and accelerated financing initiatives, as outlined in our previous blog posts on March 21 and March 24. The order also directs the heads of the Energy and Interior departments to determine whether coal used in the production of steel qualifies as a “critical material” to be placed on the Department of Energy Critical Minerals List and the Department of the Interior Critical Minerals List.
Evaluating and enabling coal mining on federal lands: The order directs the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Energy to conduct a review of coal resources and reserves contained on federal lands and submit a comprehensive report (1) outlining barriers to mining such coal resources, (2) making policy proposals to address such barriers in order to facilitate the mining of the identified coal resources, and (3) providing an analysis of the impact coal resources could have on electricity costs and grid reliability. The order further directs the Secretary of the Interior and Secretary of Agriculture to designate coal leasing activities as the primary land use for such federal lands containing coal resources identified in the report, to expeditiously process royalty rate reduction applications from federal coal lessees, and to acknowledge the end of the Jewell Moratorium. The Jewell Moratorium of 2016 established a moratorium on coal leasing on federal lands. The Moratorium was lifted by a federal court in 2024.
Extending the life of coal-powered infrastructure: In response to growing electricity demand from artificial intelligence (AI) data centers and other high-performance computing activities, the order directs the Secretary of the Interior, Secretary of Commerce, and Secretary of Energy to identify regions with coal-powered infrastructure sufficient to support AI data centers, evaluate such infrastructure for growth opportunities, and submit to the Chair of the NEDC a comprehensive report with findings and proposals.
Expansive support for coal: The order includes an expansive approach to strengthen the coal industry, including a comprehensive review of restrictive practices towards coal production, measures to increase coal exports, and support for coal technologies. These initiatives include:
Removing regulatory and policy barriers to coal production and use: The order mandates a comprehensive review of guidance, regulations, programs, and policies of executive departments or agencies that promote an energy transition away from coal production and coal-fired electricity generation, including guidance, policies, or agreements of the International Development Finance Corporation, the Export-Import Bank of the United States, and other funding agencies discouraging investment in coal-related projects. Such agencies are directed to eliminate any such preferences against coal use unless required by law.
Facilitating coal exports: The Secretary of Commerce, in coordination with other agencies, is directed to promote exports of coal technology and coal, including facilitating international offtake agreements for US coal.
Streamlining environmental review of coal projects: Agencies are directed to identify to the Council on Environmental Quality any existing or potential categorical pursuant to the National Environmental Policy Act that could support the production and export of coal.
Advancing commercial coal technologies: The Secretary of Energy is directed to take necessary actions to accelerate the development and commercialization of coal technologies, using available funding to support innovations in coal use and byproducts, batteries, power generation, and steelmaking.
Additional guidance regarding these programs and initiatives is expected to be issued within 30-90 days after the order was published on April 8. Broader implications of the reinvigoration of coal production for the data center, AI and electricity grid, and the complementary executive orders will be discussed in a separate blog post.
Three Takeaways From $745 Million Louisiana Verdict Against Chevron for Coastal Wetland Damage
Public companies can face significant liability based on past operations. While most industrial companies have long-term experience evaluating potential remediation obligations imposed by laws such as the federal Comprehensive Environmental Response, Compensation, and Liability Act, new legal theories and increased litigation from state and local governments heightens the potential for risk.
A recent $745 million verdict in a case filed by a Louisiana parish against Chevron for allegedly violating Louisiana’s State and Local Coastal Resources Management Act and associated regulations illustrates this new dynamic. The parish alleged that Chevron’s predecessor, Texaco, failed to refill canals that it had dredged and dumped contaminated wastewater, hastening erosion and land loss. The jury awarded $575 million to compensate the parish for land loss, $161 million for contamination, and $8.6 million for abandoned equipment.
This case is not alone. More than 40 similar lawsuits filed by coastal parishes and the State of Louisiana are pending against oil and gas companies. Below, we break down the facts that gave rise to the dispute, components of the jury’s verdict, and three takeaways for corporate risk managers.
Case Summary
Plaquemines Parish sits where the Mississippi River empties into the Gulf. Land loss is a significant issue, as it is in much of coastal Louisiana. The parish has lost roughly half its land area over the past century, and the state as a whole has lost roughly 2,000 square miles of land. The parish’s lawsuit claims Chevron’s actions exacerbated erosion. At trial, Chevron’s counsel pointed to another cause, levees that block Mississippi River sediment from reaching the Gulf, as the true reason for land loss.
The lawsuit specifically alleges that Chevron did not follow a state regulation requiring that its production areas “shall be cleared, revegetated, detoxified, and otherwise restored as near as practicable to their original condition.” Chevron argued, in part, that many of its operations were grandfathered in and so not required to follow the regulations.
The jury’s verdict is the latest development in a long legal journey that began when the parish filed suit in 2013. Since then, the case has made its way to federal district court, the Fifth Circuit (twice), and the US Supreme Court. The battle was principally jurisdictional. Chevron argued that its predecessor’s activities extracting and refining oil for the US military during World War II allowed it to invoke federal jurisdiction over the case. The Fifth Circuit ultimately disagreed, allowing the case to proceed in state court. Given Chevron’s intent to appeal, it may be several more years before the case is finally resolved.
Takeaways
Here are three takeaways from the jury’s verdict:
Climate-Related Liabilities Pose Increasing Risk. Fossil fuel producers have increasingly become entangled in tort litigation filed by state and local governments using a variety of legal theories. Some, like the Louisiana cases, are based on alleged violations of state environmental laws. Other cases use “greenwashing” or deceptive marketing theories, arguing that fossil fuel companies misled the public about climate change or their activities. New York and Vermont have enacted “climate superfund” laws to directly establish climate-related liability for fossil fuel companies.
Litigation Risk May Not Follow a “Red State vs. Blue State” Divide. While many climate-related lawsuits have been filed by Democratic-controlled state and local governments with an intent to address industries that they perceive to be underregulated, the Louisiana cases demonstrate that these lawsuits can be a tool of Republican-controlled governments as well, particularly when litigation can secure funding for projects that legislatures are reluctant to fund themselves. The Associated Press reports that Louisiana’s legislature has resisted industry efforts to legislatively invalidate the parishes’ claims.
Risk Managers Should Understand Impacts of Decreased Federal Funding for Programs and More State-Law Focused Claims. The change in presidential Administration is causing major changes to the environmental landscape. As the federal US Environmental Protection Agency (EPA) deregulates, state enforcement of state environmental laws may grow in importance over the coming years. State litigation may be less predictable to manage and value from a risk perspective than was federal enforcement. Compounding this challenge, reductions in federal funding from agencies including EPA and the Federal Emergency Management Agency may result in states increasingly deploying litigation to close funding gaps.
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