A Big Day at EPA – Agency Announces Reconsideration of 31 Major Agency Actions
On February 29, 2025, President Trump issued an executive order requiring agencies to identify suspect regulations for regulatory roll back within 60 days. Today, the U.S. Environmental Protection Agency (EPA) announced it will reconsider 31 EPA actions, including the Agency’s 2009 Clean Air Act finding that greenhouse gas emissions endanger public health and welfare along with many of the Agency’s flagship Clean Air Act regulations. These efforts will have far-reaching impacts on American businesses.
Womble Bond Dickinson can help your business keep up with these changes in the days ahead and advocate for your interests as this process plays out. In the meantime, we address what’s happening right now and what it could mean for your business.
What’s happening?
In a flurry of activity, EPA issued twelve press releases yesterday, March 12, 2025. Among those releases is an announcement that EPA will reconsider the following major regulatory programs:
New Source Performance Standards (NSPS) OOOOb/c regulations for the oil and gas industry;
The 2009 greenhouse gas endangerment finding under the Clean Air Act and actions that rely on that finding;
Greenhouse Gas Reporting Program;
Various regulations on power plants, including Clean Power Plan 2.0 and Mercury and Air Toxics Standards (MATS)
Light-duty, medium-duty, and heavy-duty vehicle regulations;
Hydrofluorocarbon (HFC) regulations in the Technology Transition Rule under the American Innovation and Manufacturing Act;
National Ambient Air Quality Standards (NAAQS) for PM 2.5;
Various National Emission Standards for Hazardous Air Pollutants (NESHAP) including for integrated iron and steel manufacturing, rubber tire manufacturing, synthetic organic chemical manufacturing industry, commercial sterilizers for medical devices and spices, lime manufacturing, coke ovens, copper smelting, and taconite ore processing, although this list could grow;
Regional Haze Program; and
Good Neighbor Plan.
In addition to the actions listed above, EPA issued a separate press release announcing its intent to again revisit the definition of “waters of the United States” (WOTUS) under the Clean Water Act. This definition was revised in 2015, 2019, 2020, and 2023. That rulemaking history and intervening court decisions have left 24 states and the District of Columbia implementing the 2023 rule and the remaining 26 states applying the pre-2015 regulatory regime and the Supreme Court’s 2023 decision in Sackett v. EPA. This renewed effort is sure to add yet another layer of regulatory complexity to project development and permitting.
While the definition of WOTUS is under review, EPA Administrator Lee M. Zeldin, published today a six-page Memorandum to offer further clarification of how WOTUS should be applied under both regulatory regimes currently operative in the U.S.
What could it mean for your business?
This is an incredible amount of regulatory activity to keep track of. But it is important to note that these press releases are not themselves regulatory actions. Many (if not most) of these actions will require rulemaking notices from EPA. The press releases do not include a timeline for each action, but we can expect the Agency to move quickly if it wants to accomplish this long list in the next four years.
It’s important to note that EPA does not say in these various press releases that it is staying compliance deadlines and obligations under existing regulations pending reconsideration. That’s because, at least for the announced actions that have origins under the Clean Air Act, EPA cannot stay existing rules unless authorized under the Administrative Procedures Act or the Clean Air Act.
In litigation involving EPA’s attempt during the first President Trump administration to stay NSPS for methane from the oil and gas sector for two years while it reconsidered the rule, the D.C. Circuit ruled that such stays are only authorized in limited circumstances—when reconsideration is mandatory under the Clean Air Act because issues of central relevance were impracticable to raise during the public comment period. Even then, the length of the stay is limited to 90 days.
That means all of the listed regulations remain on the books, unless otherwise stayed through judicial processes, and businesses will need to continue complying. EPA also announced that it will immediately revise its National Enforcement and Compliance Initiatives to align with the Administration’s priorities. These revisions will dictate where EPA spends its time inspecting and enforcing regulated facilities and industries. Importantly, however, even if the regulations noted are not among the revised priorities, it is no guarantee that noncompliance will go ignored while the EPA revises regulations.
Looking to the future, regulatory rollbacks are sure to face litigation. And even if these regulatory programs are rolled back significantly, businesses still face state regulation.
Businesses would be wise to identify the actions announced today that will impact their work and pay close attention as these actions are implemented by the EPA. In particular, participation in notice and comment rulemaking is foundational to both building a record and preserving issues should litigation ensue.
EPA Reschedules SACC Meetings to Consider 1,3-Butadiene Draft Risk Evaluation, Will Issue Supplement
The U.S. Environmental Protection Agency (EPA) announced on March 11, 2025, the rescheduled meeting dates of the Science Advisory Committee on Chemicals (SACC) that had been previously scheduled for February 2025 to consider and review the draft risk evaluation for 1,3-butadiene. 90 Fed. Reg. 11737. The rescheduled preparatory meeting for the SACC to consider the scope and clarity of the revised draft charge questions for the peer review will now be held on March 25, 2025, and the rescheduled peer review meeting for the SACC to consider the draft documents and public comments will now be held on April 1 – 4, 2025. EPA will accept comment on the scope and clarity of the revised draft charge questions for the peer review and the draft risk evaluation and related documents, including a new supplement of preliminarily refined risk estimates for 1,3-butadiene released from facilities in advance of and during the peer review meeting. SACC will consider the comments during its discussions. To request time to present oral comments during the preparatory meeting, stakeholders must register by 12:00 p.m. (EDT) on March 21, 2025. For those not making oral comments, registration will remain open through the end of this preparatory meeting. Written comments, including written versions of oral comments, on the scope and clarity of the charge questions are due March 21, 2025. To request time to present oral comments during the peer review meeting, stakeholders must register by 12:00 p.m. (EDT) on March 28, 2025. For those not making oral comments, registration will remain open through the end of this peer review meeting. Written comments on the draft risk evaluation and related documents, including preliminarily refined risk estimates for 1,3-butadiene released from facilities, are due March 20, 2025. Written versions of oral comments are due March 28, 2025.
Defence – A Sustainable Investment? A View From The UK’s Financial Conduct Authority
On 11 March 2025, the Financial Conduct Authority (the “FCA”) published a statement clarifying that their rules, including with regards to sustainability, do not prevent investment in or financing of defence companies. The FCA confirmed that it is at the discretion of investors or lenders as to whether they provide capital to defence companies.
The UK’s Sustainability Disclosure Requirements (“SDR”) introduced in 2023 aim to ensure that information about investments claiming to be sustainable can be trusted and readily understood. The SDR has never explicitly addressed the defence sector in SDR.
However, asset managers commonly apply exclusionary screening of investments related to weapons, typically limited to “controversial weapons” whose production and use have been deemed unacceptable under international conventions and even illegal within certain jurisdictions. Examples of such weapons include cluster munitions, anti-personnel landmines and chemical weapons. The clarity on weaponry exclusions came into sharp focus following the Russian invasion of Ukraine, prompting many to tighten their exclusionary criteria on cluster munitions in particular.
The FCA announcement follows lobbying from several Members of Parliament seeking clarity on defence investments and FCA sustainability rules. It also follows on from the statement from the previous government that directly confirmed “investing in good, high-quality, well-run defence companies is compatible with ESG considerations as long-term sustainable investment is about helping all sectors and all companies in the economy succeed”. Whilst the current Prime Minister has committed to increase defence spending recently, so far there is no statement from him or the Chancellor, Rachel Reeves, on their perspective on whether defence investments could be sustainable investments.
We wait to see if other regulators will make similar pronouncements as defence spending, and increases in it, becomes more and more in relevant to countries around the world.
EPA Extends Comment Period on Draft TSCA Risk Evaluation for DCHP
The U.S. Environmental Protection Agency (EPA) announced on March 7, 2025, that it is extending the comment period on the draft risk evaluation for dicyclohexyl phthalate (DCHP) under the Toxic Substances Control Act (TSCA). EPA released the risk evaluation for DCHP on January 7, 2025, with a comment period that closed March 10, 2025. EPA states that it will soon publish a Federal Register notice extending the public comment period for an additional 60 days. Upon publication of the Federal Register notice, EPA will accept public comments until May 9, 2025.
According to EPA’s January 6, 2025, press release announcing the availability of the draft risk evaluation, DCHP is used primarily as a plasticizer or stabilizing agent in polyvinyl chloride (PVC) products and in adhesives, sealants, paints, coatings, rubbers, and other applications. EPA preliminarily determined that DCHP presents an unreasonable risk of injury to human health for workers. EPA states that nine conditions of use (COU) significantly contribute to the unreasonable risk to workers. The draft risk evaluation preliminarily shows that DCHP does not pose unreasonable risk to the environment, the general population, or consumers. EPA notes that there are other uses of DCHP that are generally excluded from TSCA’s definition of chemical substance, such as food contact materials, and EPA did not evaluate risk associated with these uses.
Workers may be exposed to DCHP when making products or otherwise using DCHP in the workplace. According to EPA, when it is manufactured or used to make products, DCHP can be released into the water where most of it will end up in the sediment at the bottom of lakes and rivers. EPA states that if released into the air, DCHP will attach to dust particles and be deposited on land or into water. Indoors, DCHP has the potential over time to come out of products and adhere to dust particles that could be inhaled or digested.
No Harm, No Foul: Greenwashing Lawsuit Dismissed for Lack of Article III Standing
It is well-settled that under Article III of the Constitution, United States federal courts are limited to trying “cases and controversies.” Moreover, a case or controversy exists only if a plaintiff has standing to file the suit, requiring the plaintiff to demonstrate injury in fact, causation, and redressability. On February 19, 2025, the United States District Court for the Southern District of Florida issued a noteworthy decision and dismissed a putative class action lawsuit filed against lululemon athletica inc., and lululemon usa inc. (“Lululemon”) without leave to amend for lack of Article III standing.
A group of consumers filed the lawsuit alleging that Lululemon made “false, deceptive, and misleading representations” regarding the company’s products and actions as they relate to environmental initiatives in accordance with the company’s “Be Planet” campaign. Gyani v. Lululemon USA Inc., et al., 2025 WL 548405, *1 (S.D. Fla.). For example, the plaintiffs alleged that Lululemon’s website stated that it is “committed to making products that are better in every way-for…the planet.” Id. at *2. In fact, according to the plaintiffs, “Lululemon is responsible for significant GHG gas emissions, landfill waste, and release of microplastics into the environment.” Id. The plaintiffs claimed that they relied on various misrepresentations from the “Be Planet” campaign in deciding to purchase Lululemon products. Id.
The court dismissed plaintiffs’ claims, which were premised on alleged violations of various states’ consumer protection statutes. First, the court found the plaintiffs failed to adequately plead an injury in fact to support claims for monetary damages. The court highlighted that “mere allegations of having paid a price premium are insufficient — a plaintiff must tie the value of the product to any purported misrepresentations.” Id. at 4. On this point, the court found Valiente v. Publix Super Mkts., Inc., 2023 WL 3620538 (S.D. Fla. May 24, 2023) instructive. In Valiente, a plaintiff allegedly purchased cough drops due to the “phrase ‘honey lemon,’ the ‘pictures of these ingredients,’ and the statement that the product ‘soothes sore throats.’” The court dismissed the plaintiff’s claim for lack of injury because the plaintiff failed to allege that the cough drops were in any way “defective” or “worthless.” Id. at *5. The court in Gyani found the facts before it similar in that the plaintiffs’ complaint failed to allege Lululemon’s products were defective or worthless. 2025 WL 548405, *4. Moreover, the plaintiffs failed to allege deceptive or unfair acts as to the products themselves, failing to connect the allegedly problematic “Be Planet” statements to the price premium the plaintiffs alleged that they paid for Lululemon’s products. Id. at *5.
Next, the court held that the plaintiffs failed to plead an injury in fact to support a claim for injunctive relief. The court relied on Williams v. Reckitt Benckiser LLC, 65 F.4th 1243 (11th Cir. 2023) and Piescik v. CVS Pharmacy, Inc., 576 F. Supp. 3d 1125 (S.D. Fla. 2021), where the plaintiffs alleged that they “would like” to purchase the company’s products in the future “if” the defendant improved the products at issue. In Gyani, the complaint similarly alleged that the plaintiffs “would like” to purchase Lululemon’s products, however, “only if” the plaintiffs “can rely on Lululemon ‘to be truthful in their marketing statements regarding the sustainability and environmental impact of Lululemon’s products and actions.’” 2025 WL 548405, *5. The court held that such allegations failed to demonstrate harm that was actual or imminent.
Finally, the court refused to grant leave to amend. Id. at *6. The court held that the plaintiffs’ request was procedurally improper in that the plaintiffs embedded the request in their opposition brief rather than making the request via motion. Id.
Retailers and manufacturers concerned with risk associated with a growing number of environmental or “green” marketing claims will certainly welcome the Gyani decision. The ruling emphasizes that plaintiffs must demonstrate concrete economic injury linked to the at-issue marketing claims to pursue monetary relief as well as a real and immediate threat of future harm to seek injunctive relief; general allegations relating to a price premium and an equivocal desire to make future purchases are not enough. However, the decision certainly will not put an end to putative class actions asserting greenwashing claims. If faced with a similar lawsuit, retailers and manufacturers should consider whether to seek dismissal at the pleading stage when the complaint does not tie the alleged misrepresentations to the value of the product and/or does not adequately allege any real threat of future harm.
Supreme Court Limits Clean Water Act Permit Requirements in San Francisco v. EPA
On March 4, 2025, the U.S. Supreme Court in City and County of San Francisco v. Environmental Protection Agency held that “end-result” permit requirements are not allowed under the Clean Water Act (“CWA”). The Supreme Court characterized end-result requirements as “permit provisions that do not spell out what a permittee must do or refrain from doing,” but instead make a permit holder responsible for receiving water quality. Many individual and general National Pollutant Discharge Elimination System (“NPDES”) permits contain such “end-result” requirements—and the Supreme Court’s ruling is expected to have significant impacts on NPDES permitting going forward.
Background
The CWA prohibits anyone from discharging “pollutants” through a “point source” into a “water of the United States” without a NPDES permit. “Pollutants” and “point source” are broadly defined in the CWA. The Supreme Court recently addressed what constitutes a “waters of the United States,” which we discussed here.
NPDES permits authorizing discharges of pollutants are issued by authorized states, tribes, and/or the EPA, depending on which agency has jurisdiction over the discharge area. NPDES permits contain conditions to protect water quality, such as “effluent limits” that restrict the quantities, rates, and concentrations of pollutants that can be discharged by the permittee. They also include monitoring, reporting, and “best management practice” requirements.
San Francisco v. EPA Decision
In 2019, EPA and the California Regional Water Quality Control Board issued a renewed NPDES permit for a San Francisco wastewater treatment facility that discharged treated wastewater into the Pacific Ocean. The renewed permit contained two new “end-result” provisions that:
“prohibit[ed] that facility from making any discharge that ‘contributes to a violation of any applicable water quality standard’ for receiving waters” and
“provide[d] that the city cannot perform any treatment or make any discharge that ‘creates pollution, contamination, or nuisance as defined by California Water Code section 13050.’”
On appeal, the Ninth Circuit Court of Appeals upheld these end-result provisions. The Court reasoned that such open-ended conditions were authorized by CWA Section 1311(b)(1)(C), which states that EPA may impose “any” limitation necessary to meet applicable water quality standards.
In a 5-4 decision, the Supreme Court reversed the Ninth Circuit and held that the CWA does not authorize the inclusion of “end-result” provisions in NPDES permits. Rather, the agency issuing the permit is responsible for determining and spelling out specifically “what steps a permittee must take to ensure that water quality standards are met.”
To support its interpretation, the Court focused on the text of Section 1311(b)(1)(C) and the broader statutory scheme. The Court pointed to the CWA’s so-called “permit shield” provision, which deems a permit holder to be in compliance with the CWA if it follows all permit terms. Noting the importance of the permit shield given the CWA’s imposition of strict liability and harsh penalties for violations, the Court held that the permit shield’s benefit be “eviscerated” by a decision to allow end-result requirements.
The Court also emphasized differences between the CWA and the “Water Pollution Control Act” (“WPCA”), the CWA’s predecessor statute. The WPCA which included a provision expressly allowing end-result requirements, an approach the Court called “backward-looking” and “impractical” –especially in situations where multiple permittees discharge pollutants into a single water body, requiring regulators to “unscramble the polluted eggs after the fact.”
In issuing its decision, the majority heavily relied on the amicus briefs of regulated entities. The dissent believed end-result provisions benefit regulated entities by providing a regulatory tool that can avoid permit delays or denials, but the majority disagreed, stating that the “long list of municipalities and other permittees” supporting San Francisco’s position are “sophisticated entities” who are “better positioned than the dissent to judge what is good for them.”
Impact of San Francisco v. EPA
The Supreme Court’s decision puts an end to “end-result” requirements, which have been used routinely in NPDES permits issued by states and the EPA. The Supreme Court’s ruling means agencies issuing NPDES permits must translate water quality standards into specific, measurable discharge limitations, rather than simply prohibiting contributions to water quality violations.
The Supreme Court’s decision, which applies equally to federal and state NPDES permits, will likely prompt more specific permit requirements. The decision could benefit some permittees by easing permit compliance, providing more certainty as to potential CWA liability, and reducing the number and scope of enforcement actions. However, the decision is also likely to cause delays in permit issuance, while states and the EPA work to implement the new standard announced by the Court.
EPA Extends Comment Period on Draft Scope Document for Vinyl Chloride TSCA Risk Evaluation
On March 5, 2025, the U.S. Environmental Protection Agency (EPA) extended the comment period on the draft scope of the risk evaluation to be conducted under the Toxic Substances Control Act (TSCA) for vinyl chloride. 90 Fed. Reg. 11315. As reported in our January 28, 2025, memorandum, under TSCA, the scope documents must include the conditions of use (COU), hazards, exposures, and the potentially exposed or susceptible subpopulations (PESS) that EPA expects to consider in conducting its risk evaluation. The purpose of risk evaluations is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment under the COUs, including unreasonable risk to PESS identified as relevant to the risk evaluation by EPA, and without consideration of costs or non-risk factors. Comments on the draft scope of the risk evaluation for vinyl chloride are due April 2, 2025.
EU Omnibus Package: Proposed Changes to Reduce ESG Compliance Burdens for Businesses
On 26 February 2025, the European Commission (Commission) published the so-called “EU Omnibus Package” (Proposal). The Proposal aims to reduce the administrative burden for businesses operating in the EU by easing compliance requirements under several key EU environmental, social, and governance (ESG) laws, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). The Proposal must be read against the background of the “Draghi report” on European competitiveness published last year, which urged to reduce the administrative and regulatory burden within the EU, and the Commission’s target to reduce such burden by 25% overall and by at least 35% for SMEs. This GT Alert provides an overview of the most important proposed changes to these regulations.
Key Proposed Changes
Amendments to CSRD
Scope of application for EU companies: The CSRD’s scope of application would be limited to undertakings that have more than at least 1,000 employees and either a net turnover of at least EUR 50 million or a balance sheet total of at least EUR 25 million. In addition, publicly listed small and medium sized undertakings (SMEs) that do not meet these thresholds shall be completely removed from the scope of the CSRD. The Commission estimates that these changes would remove approximately 80% of the current in-scope companies from the scope of the CSRD. Currently, the CSRD still captures all “large” undertakings, being companies which meet two of the three following criteria: (i) average number of employees: 250; (ii) balance sheet total: EUR 25 million; and (iii) net turnover: EUR 50 million, as well as listed SMEs (regardless of their number of employees).
Scope of application for non-EU companies: The Proposal suggests to significantly increase the threshold for non-EU companies to be subject to reporting requirements under the CSRD. The reporting obligation for non-EU companies shall now only be triggered if the ultimate non-EU parent company has a total turnover in the EU of at least EUR 450 million at group level (now: EUR 150 million) and either a “large” EU-based subsidiary (meeting two out of three criteria referred to above) or a branch in the EU with a turnover of at least EUR 50 million (now: EUR 40 million). The employee threshold was not raised to 1,000 for EU subsidiaries of non-EU parent companies, which may have been an oversight.
Scope of reporting requirements: The scope of the reporting requirements set out in the European Sustainability Reporting Standards (ESRS) shall be simplified through a reduction of the number of data points to be reported in the CSRD report. The Proposal also removes the obligation for the European Commission to adopt delegated acts to supplement CSRD in order to, where appropriate, provide for reasonable assurance standards. This would mean that CSRD would, also in the future, only require an audit opinion about the compliance of the sustainability reporting based on limited assurance standards.
Timing of reporting: The Proposal suggests postponing the CSRD reporting requirements by two years for all so-called “wave 2” and “wave 3″ companies, i.e. companies which are currently required to report under the CSRD in 2026 (over the financial year 2025) or 2027 (over the financial year 2026). If the Proposal is adopted, these companies would only have to provide their first CSRD report in 2028 and 2029, respectively. On the contrary, the Proposal does not change the timing of the reporting for so-called “wave 1” companies (i.e. publicly listed EU companies, insurances and banks with an average number of employees during the financial year of at least 500) which are already required to do CSRD reporting in 2025 (for the financial year 2024). The Commission intends to fast-track this part of the Proposal to provide legal certainty for companies with looming reporting obligations in 2026, and to “win time” for adoption of the envisaged substantive changes (in particular the introduction of the 1,000-employee threshold). Should the substantive changes be adopted and become effective as they currently stand, the “wave 1” companies that do not meet the new scoping criteria (because they have more than 500 but less than 1,000 employees) would no longer be subject to the CSRD.
Amendments to CS3D
Timing of due diligence obligations: The Proposal leaves the thresholds for the applicability of the CS3D unchanged but proposes to postpone the deadline for Member States to transpose the CS3D into national law by one year to 26 July 2027. Consequently, the first phase of application of the new due diligence obligations (i.e. for large companies) would begin on 26 July 2028.
General limitation of due diligence obligations to direct business partners: The Proposal generally limits the due diligence obligations of in-scope companies to direct business partners. An exception (i.e. an obligation to conduct an in-depth assessment of adverse impacts at the level of indirect business partners) shall only apply in limited circumstances where the company has plausible information suggesting that adverse impacts have arisen or may arise at the level of the respective indirect business partner. Hence, it would no longer be required to monitor and assess the entire supply chain.
Greater intervals for monitoring: As another significant relief for in-scope companies, the Proposal suggests requiring companies to assess the adequacy of their supply chain due diligence measures only every five years instead of every 12 months.
Termination of business relationships: Under the Proposal, in-scope companies would no longer be required to terminate their entire business relationship with business partners towards which preventive or corrective measures have failed to address their adverse impacts on human rights or environmental objectives. Instead, they would only be required to terminate business relationships with respect to the activities concerned.
Other Proposals
The Proposal also includes:
measures to reduce the regulatory burden and scope of the Taxonomy Regulation, including by introducing materiality thresholds and reducing reporting templates by around 70%;
changes to the Carbon Border Adjustment Mechanism (CBAM), including by exempting small importers from CBAM obligations; and
an amendment to the InvestEU Regulation, involving reduced reporting requirements.
Outlook
It remains to be seen whether the Proposal will become law in its current form. It is still subject to approval by the European Parliament and the Council of the EU Member States. Generally, EU legislative procedures can last up to 18 months – which is why the Commission has asked to fast-track the changes, in particular regarding the postponement of CSRD deadlines.
Whilst some EU politicians have raised concerns that the Proposal would lead to a setback for the EU’s sustainability objectives, the Proposal would significantly reduce the compliance burden for companies and limit the CSRD’s scope of application. For this reason, the Proposal has found support in some key EU Member States (e.g. Germany). Further intense discussions can be expected as the legislative procedure moves along.
Considerations for Companies
Until the Proposal becomes final and is adopted, the existing ESG rules (including CSRD) will continue to apply. What steps should companies consider taking before then? In particular for the CSRD, the answer depends on the circumstances for each company:
Companies that are already required to report under CSRD (“wave 1” entities) in 2025 should continue to comply. Companies with more than 500 but less than 1,000 employees may no longer be required to comply after adoption of final rules, but whether those rules will indeed become effective in their current form remains to be seen.
For companies that are currently due to report under CSRD in 2026 and 2027 (“wave 2” and “wave 3” entities), the prudent approach is to continue preparing for CSRD on the basis of the existing rules.
Non-EU parent companies of EU subsidiaries or branches should reconsider applicability of the scope to determine whether they will be required to report in 2029.
All companies are advised to monitor the development of upcoming rules.
A New Alice Plot Twist – Can a Composition of Matter Be an Abstract Idea?
Federal Circuit Holds that “Polycrystalline Diamond Compact” Claims Are Not Directed to an Abstract Idea
The patent world tends to think that the Supreme Court’s framework in Alice1 is a template for determining the eligibility of software and business method inventions2. Under 35 U.S.C. § 101, abstract ideas are not eligible for patent protection.3 Ineligible abstract ideas have included claims directed to mathematical equations, certain business methods, and mental processes.4 Interestingly, the Federal Circuit recently evaluated claims directed to a diamond compact and determined that they were not directed to an ineligible abstract idea under § 101. While these composition of matter claims survived, we see implications for patent practitioners in the chemical and materials arts.
On February 13, 2025, the Federal Circuit reversed a ruling from the ITC holding claims directed to a polycrystalline diamond compact (PDC) from U.S. Patent No. 10,508,502 invalid as directed to an abstract idea.5 The PDC claims comprise “a polycrystalline diamond table . . . including: a plurality of diamond grains . . . and a catalyst including cobalt;” and “a substrate bonded to the polycrystalline table.” The claims also recite certain magnetic property ranges. The specification of the patent explains that these magnetic properties correlate to low levels of cobalt in the PDC, and low levels of cobalt are associated with stronger PDCs.6
At the ITC, the presiding ALJ applied the two-step framework of Alice7 to the claims at issue. The ALJ found that the claims recited some structural features (grain size and a catalyst), and the magnetic properties were “side effects.” The ALJ further reasoned that “[t]here may be some causal connection” between the recited magnetic properties and structures, but it “is so loose and generalized” that the “claimed limitations appear to be little more than side effects.”8 The ITC largely agreed and determined that the magnetic properties were merely the “the result of sintering conditions and input materials that went into manufacturing the PDC.”9
The Federal Circuit held that the “claims are directed to a specific, non-abstract composition of matter—a PDC—that is defined by its constituent elements . . ., particular dimensional information . . ., and quantified material properties . . . .”10 The court disagreed with the ITC’s reliance on the patent specification’s use of “may” to support its position that the correlation between the magnetic properties and structural features is “too weak and equivocal.” Rather, the paragraphs employing “may” also have sentences that unequivocally use “indicates” to establish the correlation.11 Further, the patent includes several working PDC table examples illustrating that the claimed magnetic properties are indicative of low levels of cobalt in comparison to prior art PDC tables.12 Ultimately, “no perfect proxy” is required to tie the recited properties to the recited structure.13
US Synthetic offers takeaways for patent practitioners who draft composition of matter claims. There is at least some risk that a recited property in a composition of matter claim could be held an ineligible abstract idea under § 101. One can substantially reduce this risk by working with inventors to draft patent applications that: (a) identify actual examples and comparative examples that illustrate a relationship between the recited properties and structure; (b) include specification passages that discuss proven or believed relationships between each of the claimed properties and structure; (c) avoid the use of the term “may” in the patent specification when correlating properties to structure; and (d) avoid equivocation when supporting claimed elements in the specification. At the same time, patent drafters should avoid couching these property/structure connections as the invention or as being critical to the invention because these constructions might be construed by a court as limitations in claims that do not expressly recite these properties and/or structures.
If you have any questions about the impact of US Synthetic or patent issues more generally, please contact your Miller Canfield attorney or the authors of this alert.
Footnotes
1 Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014).
2 See generally U.S.P.T.O. Manual of Patent Examining Procedure (MPEP) § 2106.04(a).
3 E.g., Diamond v. Diehr, 450 U.S. 175, 185 (1981).
4 See MPEP § 2106.04(a).
5 US Synthetic Corp. v. Int’l Trade Comm’n, __ 4th__, 2025 WL 478762, No. 2023-1217 (Fed. Cir. Feb. 13, 2025).
6 Id. at *1-4.
7 In the first step, the court must assess the claims in their entirety to determine “whether their character as a whole is directed to excluded subject matter.” Alice, 573 U.S. at 218. If the claims are directed to an abstract idea, step two requires the court to assess “the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.” Id. at 217.
8 US Synthetic, 2025 WL 478762, at *4.
9 Id. at *5.
10 Id. at *6.
11 Id. at *7.
12 Id. at *8.
13 Id. at *7.
Expanded Interpretation of Price-Anderson Act Is Another Positive Sign for Commercial Nuclear Development in the United States
On 10 February 2025, the US Court of Appeals for the Federal Circuit (Federal Circuit) issued a decision in Cotter Corp. v. United States that solidified a broad interpretation of the applicability of contractual and statutory indemnity under the Price-Anderson Act (PAA) for nuclear accidents.1 The Federal Circuit’s decision is a positive development for the commercial nuclear industry because it takes a broad view of when a noncontracting party can take advantage of an indemnification issued under a government contract.
Originally enacted in 1957, the PAA was designed to address the risk of substantial liability following a nuclear incident, as such liability was viewed as a major disincentive to private industry investment in nuclear power generation. The PAA authorized the federal government to “make funds available for a portion of the damages suffered by the public from nuclear incidents and to limit the liability of those persons liable for such losses.”2 The PAA also added several provisions concerning government indemnification of persons liable for harm from nuclear incidents, authorizing the federal government “to enter into agreements of indemnification with its contractors for the construction or operation of production or utilization facilities or other activities under contracts for the benefit of the United States involving activities under the risk of public liability for a substantial nuclear incident.”3
Cotter Corporation (N.S.L.) (Cotter), which conducts mining and milling, incurred liability through a settlement based on allegations that it injured members of the public in the St. Louis area by releasing, between 1969 and 1973, radioactive materials and residues originally produced by another company, Mallinckrodt, pursuant to a contract with the federal government. That contract, to which Cotter was not a party, obligated the government to indemnify Mallinckrodt for nuclear accidents. Cotter filed a claim against the United States for statutory and contractual indemnification seeking the benefit of this indemnity.
In 2023, the US Court of Federal Claims dismissed Cotter’s claims.4 The Claims Court interpreted the PAA narrowly, effectively requiring “(a) a contemporaneous relationship between the liability-generating acts of the non-contractor indemnity claimant (Cotter) and the performance of the contract (by Mallinckrodt or the government) and, seemingly, (b) that the indemnity claimant’s activities (generating liability to others) were related to the contractual activities in the particular sense of contributing to the performance of the contract.”5 According to the Claims Court, Cotter’s activities occurred years after the contract at issue was terminated and did not sufficiently relate to the performance of the government contract.6 “[M]ere later ownership and possession of radioactive material that resulted from [such a] Contract” was not sufficient to claim indemnity, according to the Claims Court.7
Cotter appealed the decision to the Federal Circuit, which rejected this narrow interpretation, holding that “‘persons indemnified’ [under the PAA] is defined broadly to cover not just the contractor but ‘any other person who may be liable for public liability.’”8 The Federal Circuit further held that “[p]ublic liability, in turn, broadly reaches the public by embracing ‘any legal liability arising out of or resulting from a nuclear incident,’… and that] ‘nuclear incident’ covers ‘any occurrence within the United States causing bodily injury… arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of source, special nuclear, or byproduct material.’”9
The Federal Circuit concluded that none of the statutory definitions “limit indemnity to the period before the government contract ended or includes a requirement that the indemnity claimant’s (exposure-causing) activity was contributing to the contracting parties’ performance.”10 Instead, the Federal Circuit held that the statutory scheme is “focused simply on the hazard from the material—a hazard that is not limited in time to the period of performance of a particular contract and may be long lasting, for at least some of the covered nuclear materials.”11 The Federal Circuit concluded that “a contract-termination temporal limit (i.e., excluding government compensation if and when harm occurred after termination) would undermine the declared statutory purposes ‘to protect the public’ and remove an important deterrent to private investment in nuclear energy.”12
The Federal Circuit concluded that causation was a requirement for indemnity purposes and that there needed to be a sufficient causal connection between the contract containing the indemnity and the claim. However, because the contract here dealt with the creation of the hazardous material that was the source of the damages—a radioactive release—the Federal Circuit found sufficient causation.
With the relatively recent renewed focus on nuclear power as a reliable baseload power solution (particularly to power data centers), the Cotter Corp. decision clarifies the expansive nature of indemnification under the PAA and will likely further encourage nuclear projects underway in the United States.
Footnotes
1 No. 1:22-cv-00414-DAT, 2025 U.S. App. LEXIS 2969 (Feb. 10, 2025), https://www.cafc.uscourts.gov/opinions-orders/23-1826.OPINION.2-10-2025_2465769.pdf.
2 Id. at *6–7.
3 Id.
4 Cotter Corp. (N.S.L.) v. United States, 165 Fed. Cl. 138 (Fed. Cl. 2023).
5 Cotter Corp., 2025 U.S. App. LEXIS 2969, at *28.
6 Id. at *21.
7 Id. at *29.
8 Id. at *30.
9Id. at *32.
10 Id. at *31–32.
11 Id.
12 Id.
Removal of NEPA Implementing Regulations to Alter Landscape of Federal Environmental Review
On February 25, 2025, the Council on Environmental Quality (CEQ), the advisory agency within the Executive Office of the President meant to assist and advise the President on certain environmental matters including the administration of the National Environmental Protection Act (NEPA’), issued an interim final rule removing all of CEQ’s NEPA implementing regulations from the Federal register. This rule goes into effect on April 11, 2025, and has a public comments period running until March 27, 2025. This comes in response to two court rulings and two executive orders (E.O.s) that have challenged CEQ’s regulatory authority in the past few months.
NEPA
NEPA requires federal agencies to review the environmental impact of “Major Federal actions” such as issuing permits, providing federal funding, and issuing regulations. In 1978, in response to an executive order issued by President Carter, the Council on Environmental Quality issued regulations that created a system that required all federal agencies to complete an environmental impact statement, an environmental assessment, or to determine that the action qualifies for a “categorical exclusion” whenever undertaking a of “Major Federal actions.” This system has
Backdrop
On November 12, 2024, the D.C. Circuit Court of Appeals ruled in Marin Audubon Society v. Federal Aviation Authority t that CEQ’s NEPA implementing regulations are beyond the scope of their powers because the agency lacks congressional authorization to promulgate binding regulations. On February 3, 2025, the District Court for the District of North Dakota decided Iowa v. CEQ, adopting the reasoning of Marin Audubon Society found that CEQ lacks statutory authority to promulgate binding rules implementing NEPA.
Further, the Trump administration signed E.O. 14154, Unleashing American Energy, which revoked prior E.O.s dating back to the Carter administration granting CEQ authority to promulgate regulations to implement procedures for the NEPA process and directed CEQ to issue guidance on implementing NEPA and to propose rescinding the NEPA implementing regulations.
Finally, on February 19, 2025, CEQ issued a new Memorandum on the Implementation of NEPA to all federal departments and agencies pursuant to E.O. 14154’s directive to issue new guidance “expedit[ing] and simplify[ing] the permitting process” and the NEPA process.
Effects
The Memorandum on the Implementation of NEPA “encourages” agencies to use the CEQ regulations issued during the first Trump Administration as “an initial framework” or “consider voluntarily relying” on CEQ regulations for ongoing NEPA reviews and lawsuits on NEPA reviews completed while the regulations were still in effect until agencies individually revise or establish their own NEPA implementing procedures by February 19, 2026. This lack of concrete guidance on whether an agency should voluntarily follow the 2020 CEQ NEPA regulations or rely on the statutory text and any agency-specific NEPA regulations as the basis for their NEPA reviews combined with the differences between the level of detail in individual agency NEPA regulations, could result in inconsistent approaches across agencies.
Similarly, that uncertainty will likely provide additional grounds for challenges to forthcoming NEPA reviews and the validity of the Interim Final Rule itself. Until courts establish a new regime of NEPA review in the post-CEQ NEPA regulations world, the future for NEPA lawsuits will likely be fact and court-specific, potentially leading to greater uncertainty.
Additionally, while CEQ’s Memorandum expressly states that “[a]gencies should not delay pending or ongoing NEPA analyses while undertaking these revisions,” the removal of a regulatory structure that has been in place for nearly 50 years may cause delays in the NEPA review process in the short-term.
ECHA Updates Annual Evaluation Statistics and Recommendations to Registrants on Improving Dossiers
The European Chemicals Agency (ECHA) announced on February 26, 2025, that it has updated its annual statistics on evaluation progress. According to ECHA, between 2009 and 2024, it checked the compliance of 15,500 Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation registrations, representing 23 percent of all submitted registration dossiers and covering 3,200 substances. For high-volume chemicals registered at quantities of 100 metric tons or more per year, ECHA has checked 34 percent of the registrations. ECHA notes that based on the evaluations, it updated its recommendations to registrants on how to improve their dossiers.
In 2024, ECHA carried out 313 compliance checks, covering almost 2,000 registrations and addressing 272 individual substances. ECHA notes that these checks focused on those registration dossiers that may have data gaps. As a result, ECHA sent 208 decisions to companies, requesting additional data to clarify long-term effects of chemicals on human health or the environment. ECHA states that it also examined 161 testing proposals and sent out 92 decisions, addressing the tests proposed by industry to ensure the safe use of the substance.
To follow up information requests sent to companies, ECHA states that it checks whether the provided information complies with the REACH requirements. In 2024, ECHA concluded this evaluation for 241 substances. According to ECHA, in about 70 percent of the cases, companies provided the requested information. ECHA notified the remaining 30 percent to European Union (EU) member states for enforcement and will follow up. ECHA also adopted three substance evaluation decisions prepared by EU member states, requesting further information to assess the safety of substances of potential concern.