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NJDEP Adopts Environmental Justice Regulations
The New Jersey Department of Environmental Protection (“NJDEP” or the “Department”) adopted its long discussed Environmental Justice Rules (“EJ Rules”) on April 17, 2023. The Department has touted these rules as the first of their kind in any state.
Eight types of facilities are subject to the EJ Rules: 1) major sources of air pollution; 2) resource recovery facilities or incinerators; 3) sludge processing facilities, combustors, or incinerators; 4) sewage treatment plants with a permitted flow of more than 50 million gallons per day; 5) transfer stations or other solid waste facilities, or recycling facilities intended to receive at least 100 tons of recyclable material per day; 6) scrap metal facilities; 7) landfills; 8) certain medical waste incinerators.
A permit applicant will be subject to the EJ Rules when it submits an application to NJDEP for a “new or expanded facility, or the renewal of an existing major source permit, for a facility located or proposed to be located, in whole or in part, in an overburdened community, or to Solid Waste Management Plan actions.” A list of overburdened communities (“OBCs”) has been developed by the Department and is available on its website.
To comply with the EJ Rules, applicants must prepare an environmental justice impact statement (“EJIS”). The EJIS will include a description of the municipal and neighborhood setting, the facility’s current and proposed operations including an explanation of “the purpose of the permit application” and “how the project serves the needs of the individuals of the [OBC],” a discussion of the pollution and environmental control measures that will be used, and “other information relevant to the potential for the facility to contribute to environmental and public health stressors in the [OBC].” Additionally, an EJIS must include a public participation plan. Finally, for new facilities, the EJIS must discuss how the facility will “serve a compelling public interest in the [OBC].”
If the Department determines a facility is located or proposed to be located in an OBC that is “subject to adverse cumulative stressors or the facility cannot demonstrate that it will avoid a disproportionate impact,” the application must provide supplemental information. This will include information related to traditional environmental concerns such as wildlife, flooding, water quality, air quality, and outdoor recreation.
Once an EJIS is complete and all required supplemental information provided, the Department will issue authorization for an applicant to proceed to the public participation process. As part of this process, the applicant will need to provide the required public notice, a public hearing, and a time for written comment submissions. Following the completion of the public participation process, the Department will decide whether the facility will avoid a disproportionate impact and whether additional conditions regarding environmental justice will be incorporated into any subsequently issued NJDEP permits.
For new facilities, the Department will deny an application if the applicant cannot avoid a disproportionate impact, unless “that proposed facility will serve a compelling public interest in the overburdened community.” NJDEP will apply a demanding standard to demonstrate that a facility serves “a compelling public interest.” That is, such a facility is one that “primarily serves an essential environmental, health or safety need of the individuals in an overburdened community,” is necessary to do so, and for which there are no reasonably available alternatives. Per the Department, this definition “will facilitate projects … such as schools or hospitals.” Economic benefits are not considered in this analysis.
For facility expansions and for major source air permit renewals, in contrast, the Department may not outright deny an application under the EJ Rules. Instead, the Department may impose conditions on the permit “as necessary to avoid or minimize contributions to adverse environmental and public health stressors.”
Effectively, the EJ Rules “will require certain facilities seeking certain permits in [OBCs] to prepare an [EJIS] and conduct a public hearing to ensure meaningful public participation in the permitting process.” The goal of this public participation and process is to “avoid increases to environmental and public health stressors” in OBCs, but it also will lead to greater regulatory and, in some instances, litigation hurdles for the affected facilities and operators.
EPA Proposes Stringent New Standards for PFAS in Drinking Water
The U.S. Environmental Protection Agency ("EPA") proposed the first national drinking water standards for per- and polyfluoroalkyl substances ("PFAS"), sometimes called “forever chemicals,” on March 14, 2023.
The proposed rule would establish maximum contaminant levels ("MCLs") for six PFAS known to be found in drinking water, including perfluorooctanoic acid ("PFOA"), perfluorooctane sulfonic acid ("PFOS"), perfluorononanoic acid ("PFNA"), hexafluoropropylene oxide dimer acid ("HFPO-DA", commonly known as GenX chemicals), perfluorohexane sulfonic acid ("PFHxS"), and perfluorobutane sulfonic acid ("PFBS"). Under the new rule, public water systems would be required to monitor for these chemicals, alert the public regarding PFAS levels, and take measures to decrease them if they surpass the approved standards.
EPA anticipates that the proposed rule will be finalized by the end of 2023.
The Proposed Rule’s Impact on New Jersey
If finalized as written, the new rule will have significant implications for public water systems across the nation, and New Jersey is no exception. Under New Jersey law, National Primary Drinking Water Regulations like the newly proposed PFAS standards are automatically incorporated into the State’s Safe Drinking Water Act Regulations. N.J.A.C. 7:10-5.1. Typically, the federal drinking water standards establish a floor upon which New Jersey sometimes implements additional restrictions. But in this case, EPA’s proposed rule is substantially stricter than New Jersey’s current PFAS MCLs, which the New Jersey Department of Environmental Protection ("NJDEP") promulgated in 2020 (for PFOA and PFOS) and 2018 (for PFNA).
For example, New Jersey currently has enforceable MCLs for just three PFAS: PFOA, PFOS, and PFNA. The new rule would add to that list PFHxS, PFBS, and the GenX Chemicals. Moreover, the EPA rule sets the MCL for PFOA and PFOS at 4 parts per trillion (ppt), several times lower than New Jersey’s current MCL of 14 ppt for PFOA and 13 ppt for PFOS and PFNA. The four other PFAS will be regulated under a mixture standard under EPA’s proposal, whereby a hazard index will be used to determine if the combined levels of any of those PFAS in a given water system pose a potential risk.
In addition, the automatic incorporation into New Jersey’s Safe Drinking Water Act regulations of EPA’s proposed MCLs also will have the effect of changing New Jersey’s groundwater remediation standards for PFAS. The Department’s regulations require that “the health-based level used to establish [an] MCL shall be the specific groundwater quality criterion for the constituent.” N.J.A.C. 7:9C-1.7(c)(3)(i). In turn, these groundwater quality standards are the groundwater remediation standards for Class II groundwater, which is the groundwater classification for most of the state. N.J.A.C. 7:26D-2.2(a)(1).
Claims for PFAS Treatment Costs in New Jersey
New Jersey’s idiosyncratic statutory scheme for recovery of environmental cleanup costs under the Spill Act may provide unique opportunities for recovering treatment or remediation costs that the strict MCLs for PFAS under EPA’s proposed rule could require. NJDEP has designated PFOA, PFOS, and PFNA, but not the other PFAS compounds covered under EPA’s proposed rule, as “hazardous substances” under the Spill Act. Costs to address drinking water contaminated with hazardous substances are considered “cleanup and removal costs” that are recoverable under the Spill Act's strict liability scheme. Finally, and most significantly, recent decisions of New Jersey courts have left open the possibility that parties who manufactured and sold hazardous substances, including PFAS, could be strictly liable under the Spill Act even if those parties are not themselves the discharger. We have previously written on our blog here and here about cases implicating this novel and evolving theory of Spill Act liability. If non-discharging manufacturers of PFAS are found to be strictly liable under the Spill Act, it will be simpler for parties incurring costs to treat PFAS in drinking water or to comply with increasingly stringent PFAS remediation standards to recover some of these costs. This theory of Spill Act liability would relieve potential plaintiffs of the burden to pinpoint the source of a PFAS discharge, which often could be difficult to prove given the ubiquitous presence of PFAS in groundwater in New Jersey.
At the federal level, EPA has proposed a rule identifying PFOS and PFOA as hazardous substances, which could open the door to CERCLA claims for the costs of treatment of drinking water to meet the proposed stringent MCLs. However, unlike under New Jersey’s Spill Act, CERCLA precedents are clear that parties who are merely selling a useful product, rather than disposing of a waste, are not liable. Thus, parties asserting CERCLA claims for PFOS or PFOA treatment costs will have to identify the particular source or sources of contamination, a hurdle that may prove difficult or impossible to surmount in certain circumstances.
If adopted, EPA’s proposed rule establishing PFAS MCLs may impose significant costs on water purveyors across the country and in New Jersey, where PFAS frequently have been detected in groundwater at levels exceeding NJDEP’s remediation standards. Water purveyors who may incur such costs, and parties incurring costs to remediate PFAS in groundwater, should keep abreast of ongoing developments in Spill Act litigation, which may provide unique opportunities for recovering these costs from other parties.
Court Denies Pre-Enforcement Review of NJDEP Direct Oversight Determination
The New Jersey Supreme Court has long recognized a presumption of judicial review of administrative action grounded in the State constitution. The presumption of judicial review of agency actions, however, often does not extend to pre-enforcement review. When the New Jersey Department of Environmental Protection (“NJDEP”) issues an administrative compliance order to abate an environmental hazard, the absence of pre-enforcement review leaves the order’s recipient in a difficult position. Indeed, the recipient is left with only two choices: (1) refuse to comply with the order and wait for NJDEP to enforce the order in court, while incurring significant daily penalties for non-compliance or (2) consent to NJDEP’s order rather than incur civil penalties or risking an unfavorable outcome in litigation. As the Appellate Division’s recent decision in In re NJDEP Direct Oversight Determination Against Solvay Specialty Polymers USA, LLC demonstrates, New Jersey courts remain reluctant to grant pre-enforcement review of administrative compliance orders.
NJDEP issued a statewide directive in March 2019 holding Solvay and several other entities responsible for discharging per-and polyfluoroalkyl substances (“PFAS”), into the air, land and water near its facility (“Site”), which sits on the Delaware River. (See our earlier article discussing another case arising from this Site). The directive required specific steps to be taken, including estimating future costs of remediation for which Solvay would be responsible, operation and maintenance of drinking water treatment systems, production of information on PFAS and reimbursement of NJDEP costs. The directive stated that if Solvay failed to comply, it would be subject to civil penalties in the form of treble damages under the Spill Compensation and Control Act (“Spill Act”). After Solvay failed to comply, the Department issued a determination that Solvay’s remediation of the Site was subject to direct oversight due to Solvay's failure to comply with the site-specific timeframes set forth in the statewide directive and the injury to one or more sensitive natural resources by contamination from the Site.
Although licensed site remediation professionals generally oversee the remediation of contaminated sites under the Site Remediation Reform Act (“SRRA”), including selecting and implementing the remedial action, the SRRA also authorizes the Department to undertake “direct oversight” of the remediation. NJDEP can impose direct oversight if the party responsible for conducting remediation fails to complete the cleanup within mandatory timeframes (i.e., “compulsory oversight”) or if NJDEP determines that an injury has been caused to at least two environmentally sensitive natural resources (i.e., “discretionary oversight”). NJDEP asserted that Solvay was subject both to compulsory direct oversight due to its failure to comply with site-specific timeframes and discretionary direct oversight because one or more natural resources (i.e., the Delaware River) were injured by contamination from the Site.
Solvay appealed NJDEP’s decision and contended that NJDEP’s direct oversight determination violated its due process rights as set forth in In re Kimber Petroleum Corp., 110 N.J. 69 (1988), in which the New Jersey Supreme Court held that treble damages could not be imposed, even where the party ultimately was liable under the Spill Act, if a party had “good cause” not to comply with a Spill Act directive. Specifically, Solvay argued that it was entitled to pre-enforcement judicial review before it was subject to Direct Oversight. Solvay further contended NJDEP’s determination that it was subject to Direct Oversight was arbitrary, capricious and unreasonable because NJDEP had not adopted surface water standards or screening criteria for PFAS. Shortly after Solvay appealed, NJDEP filed a complaint in Superior Court to compel Solvay to complete the remediation of the Site and to determine whether Solvay failed to comply with the directive.
In ruling against Solvay, the court emphasized that the mere issuance of a direct oversight determination does not automatically trigger the due process protections set forth in Kimber. The court explained Kimber made clear that the adjudication of a good-cause defense to a directive only occurs after the recipient refuses to comply with the directive and NJDEP elects to bring an enforcement action in court to enforce the directive. In finding that Solvay was not entitled to pre-enforcement review, the court emphasized that NJDEP’s direct oversight determination was not a monetary penalty, which would require an adjudicatory hearing before any penalties could be imposed. Rather, the court found the Department’s determination was merely an enforcement tool through which it sought compliance with the statewide directive while its enforcement action — and Solvay’s good-cause defenses — are being adjudicated in the Law Division. As a result, Solvay’s due process rights were not violated and pre-enforcement review was not warranted because treble damages would only be assessed if Solvay’s grounds for disobeying the directive were not objectively reasonable, i.e., Solvay lacked “good cause” for its non-compliance. Thus, the court reasoned that if NJDEP’s directive was later deemed to be legally insufficient or otherwise invalid, a court could invalidate the directive when NJDEP seeks to enforce it, thereby providing Solvay due process by affording it a full and fair opportunity to oppose the directive before any deprivation of property occurs.
Notably, the court gave little consideration to Solvay’s contention that discretionary direct oversight was not appropriate here because NJDEP had yet to promulgate surface water standards for PFAS. Solvay argued that, without having promulgated actual standards or screening criteria for PFAS, NJDEP could not conclude that the surface water injury to the Delaware River and its tributaries was attributable to Solvay’s site. The court’s ruling on this issue was somewhat surprising in light of the case law requiring NJDEP to promulgate remediation standards in compliance with Administrative Procedure Act notice and comment rulemaking procedures before it can enforce such standards against a regulated entity. See Federal Pacific Electric Co. v. NJDEP 334 N.J. Super. 323 (App. Div. 2000). The court, however, largely sidestepped this issue and found that the record contained ample evidence that the presence of PFAS caused injury to natural resources, Solvay was not in compliance and its remediation efforts were insufficient.
The Solvay decision provides no relief to recipients of an administrative compliance order to abate an environmental hazard. Going forward, courts likely will continue to preclude an alleged responsible party from challenging the merits of an administrative compliance order prior to an NJDEP enforcement or cost recovery action.
EPA Proposes New PFAS Reporting Requirements for the Toxic Release Inventory
The U.S. Environmental Protection Agency (“EPA”) released a proposed rulemaking in December to add per- and polyfluoroalkyl substances (“PFAS”) subject to reporting under the Emergency Planning and Community Right-to-Know Act (“EPCRA”) and the Pollution Prevention Act to the list of Lower Thresholds for Chemicals of Special Concern.
Under the EPCRA, certain facilities that manufacture, process or otherwise use listed chemicals in amounts above reporting threshold levels must annually report environmental releases and other waste management quantities of the listed chemicals. This “Toxic Release Inventory,” or “TRI,” provides EPA and the public with information regarding the releases and use of chemicals from covered facilities. EPA states that the proposed changes will result in greater reporting of the use and waste management of PFAS, including PFAS contained in chemical mixtures and trade name products.
In the rulemaking, EPA notes that PFAS tend to accumulate and remain in the environment and the human body for extended periods of time. Due to this longevity, PFAS are commonly known as “forever chemicals.” PFAS have been used for several decades in a variety of consumer and industrial products.
EPA’s proposal notes that these PFAS already have a lower reporting threshold of 100 pounds. Besides that existing requirement, the addition of these PFAS to the list of chemicals of special concern would eliminate the use of the de minimis exemption for PFAS and the option to use the less burdensome Form A.
Facilities subject to EPA’s TRI Program generally must submit TRI “Form R,” but, if certain threshold requirements apply, the less burdensome “Form A” may be submitted instead. Form R is a more comprehensive annual report of the use and release of listed chemicals, which includes one chemical per form. Form A is a more general form on which multiple chemicals may be reported on a single form. Unlike Form R, Form A requires only the identity of the listed chemical and does not require the submission of any information on releases, waste management, source reduction, or any other chemical-specific information. The rulemaking would eliminate the option for the use of Form A for PFAS, and would “result in an additional 605 to 1,997 Form R reports being filed annually.”
EPA further proposes to “remove the availability of the de minimis exemption for purposes of the Supplier Notification Requirements for all chemicals on the list of chemicals of special concern.” As this proposal applies beyond PFAS compounds to all chemicals listed as “chemicals of special concern,” it will likely have an even broader impact. Under the existing de minimis exemption, suppliers are not required to provide notifications for mixtures or trade name products containing listed chemicals where the chemical concentration is below one percent (1%) of the mixture. EPA’s concern is that this exemption accounts for concentration but not quantity. So, “it is possible that significant quantities of chemicals of special concern can be overlooked by reporting facilities if suppliers can use the de minimis exception.” EPA proposes to eliminate this exception for all chemicals of special concern, including PFAS, and suggests this change “will help ensure that purchasers of mixtures and trade name products containing such chemicals are informed of their presence in mixtures and products they purchase.”
Potential affected industries are myriad. According to EPA’s rule proposal, firms engaged in the industrial inorganic chemicals, coal and metal mining, and solvent recovery services industries, among many others, could be impacted by these new rules.
“Additive Limitations": Regulations May Clarify Clean Water Act Jurisdiction Ahead of Sackett Decision
On May 25, 2023, the Supreme Court issued its decision in the case discussed below, Sackett v. EPA. The Court’s holding is inconsistent with the EPA and Army Corps of Engineers’ recently promulgated “Revised Definition of the ‘Waters of the United States’” rule, and significantly limits the federal jurisdiction over wetlands expressed in the rule. Unlike the interpretation of the jurisdictional limits of Clean Water Act § 404 espoused in the agency rulemaking, which looks to whether an wetland adjacent to a traditional navigable waterway has a significant nexus and the “necessary relationship to other covered waters,” the Court established a test that is more in line with Justice Scalia’s 2006 plurality opinion in Rapanos v. United States. Under this test endorsed in the Court’s Sackett opinion, in order to fall under federal jurisdiction, a wetland adjacent to a traditional navigable waterway must have a “continuous surface connection” with the larger water which “make[s] it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” A forthcoming article in the Riker Danzig Environmental Law Blog will discuss in more detail the nuance and impacts of this decision on the continuing saga of the “Waters of the United States.”
On December 30, 2022, at a time that can only be described as temporally adjacent, even actually abutting, the highly anticipated decision from the Supreme Court in Sackett v. EPA, the U.S. Environmental Protection Agency (“EPA”) and the Army Corps of Engineers (“ACE”) submitted for publication in the Federal Register a joint final rule called “Revised Definition of the ‘Waters of the United States’” (the “WOTUS Rule”) under the Clean Water Act (“CWA”). The WOTUS Rule becomes effective sixty days after its publication.
The 514-page WOTUS Rule aims to define “the scope of waters protected under the [CWA],” thus providing clarity regarding the jurisdictional scope of the CWA for the regulated community and the public. Specifically, under the WOTUS Rule, EPA and ACE interpret the “waters of the United States” to include: (1) traditional navigable waters; (2) impoundments and tributaries of traditional navigable waters; (3) wetlands “adjacent” to traditional navigable waters and to impoundments and tributaries of traditional navigable waters; and (4) certain intrastate waters.
Regulatory clarity under the CWA historically has proven elusive with regard to the scope of jurisdiction over tributaries of navigable waters and adjacent wetlands. Whether or not the WOTUS Rule will achieve such clarity remains to be seen. Additionally, aspects of the WOTUS Rule concerning the scope of jurisdiction over non-traditional navigable waters such as tributaries and wetlands are likely to be controversial and challenged in court. In particular, in Sackett, the Justices are currently considering the appropriate test by which to determine whether wetlands fall under CWA jurisdiction.
Regulatory agencies and the courts have struggled to define the “waters of the United States” since Congress initially included the phrase as the definition of the term “navigable waters” under the CWA. As early as 1974, ACE initially offered an interpretation that limited jurisdiction to traditional navigable waters. However, EPA and reviewing courts applied a broader definition of the “waters of the United States” that included navigable waters, their tributaries, interstate waters, and intrastate waters that touch on interstate commerce. In a 1977 rulemaking, the ACE revised its previously narrow interpretation to reflect the broad application provided by EPA and the courts.
The Supreme Court first weighed in on the permissible scope of “waters of the United States” in 1985 in United States v. Riverside Bayview Homes, Inc. Conducting an early Chevron review (as that case had been decided only about a year earlier), the Court unanimously held that the ACE was reasonable in interpreting wetlands adjacent to traditional navigable waters, which “function as integral parts of the aquatic environment,” as included under the definition of “waters of the United States.” Later, in 2001, the Court tempered the scope of the CWA in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (a/k/a, “SWANCC”) in which it overturned the “Migratory Bird Rule,” which had extended CWA jurisdiction to intrastate waters that are used as habitat by migratory birds.
The muddled plurality decision in Rapanos v. United States followed in 2006. In that case, a four-Justice plurality interpreted “waters of the United States” as including “relatively permanent, standing or continuously flowing bodies of water” connected to traditional navigable waters, and wetlands with a “continuous surface connection” to those waters. In a concurring opinion, Justice Kennedy offered that “waters of the United States” includes water or a wetland that possesses a “significant nexus” to traditional navigable waters. A four-Justice dissent concluded that “waters of the United States” encompass tributaries and wetlands that satisfy either of these competing tests.
After Rapanos, the definition of “waters of United States” entered an extended period of regulatory limbo between different administrations. In 2015 the Obama Administration tried its hand at defining “waters of the United States” under the “Clean Water Rule,” 80 FR 37054, which the Trump Administration later repealed, 84 FR 56626. In 2020, EPA and ACE under the Trump Administration issued the “Navigable Waters Protection Rule,” 85 FR 22250, which was vacated or remanded by at least six reviewing courts.
The WOTUS Rule, per its preamble, is “consistent with the general framework of the 1986 regulations” (which “have largely been in place since 1977”). The preamble offers further that “the concept of adjacency and the significant nexus standard create separate, additive limitations that work together to ensure that such wetlands are covered (i.e., jurisdiction under the [CWA]) when they have the necessary relationship to other covered waters.” Query as to whether the Court’s anticipated Sackett decision concerning the scope of CWA jurisdiction will agree with the agencies and apply these “additive limitations” in interpreting “waters of the United States.”
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