On June 29, 2018, we blogged about the dusky gopher frog, an obscure endangered species that lives only in a small area of Mississippi. The U.S. Fish & Wildlife Service nonetheless designated several hundred acres in Louisiana as critical habitat, even though the frog has not lived there for over 50 years and could not survive without substantial changes to the property.  The government has no legal authority to direct the owner of private land to make such changes.  A badly divided Fifth Circuit upheld the designation.

On Monday, October 1, 2018, the Supreme Court heard argument in the landowner’s appeal. Weyerhaeuser Co. v. U.S. Fish & Wildlife Service, No. 17-71.  Based on the judges’ questions, the Court appears to be dividing along familiar lines, assuming the silent Justice Thomas agrees with the conservatives.

One never knows how a case may turn out until the opinion is published, and there are several issues both legal and factual on which the justices have not really staked out a position.  The first is whether land could ever be “critical habitat” under the Endangered Species Act if the endangered species does not currently inhabit it and could not survive without changes to the land.  The liberal justices apparently think that the answer is yes, if the cost of the changes is reasonable.  The alternative, they suggested, would be to allow the species to expire.

Weyerhaeuser disagreed on both the legal and the factual aspects of that hypothetical, arguing that the plain meaning of “habitat” is where a plant grows or an animal lives. Weyerhaeuser also argued that the cost would be unreasonable and that the government could always buy the land and make the necessary improvements itself.

The more conservative justices wanted to know where in the statute one could find the reasonableness concept.  They also wanted to know who was supposed to pay for the necessary changes and why the government could not take other steps to preserve the species.

The parties also clashed on a technical point of administrative law.  The Secretary of the Interior has discretionary authority to exclude land from the critical habitat if s/he determines that the benefits of exclusion outweigh the benefits of inclusion.  The Fifth Circuit held that such a decision was not subject to judicial review.  Weyerhaeuser argued that the Court had previously held that the Administrative Procedure Act does authorize such review and gave an example of how irrational it thought the failure to exclude its lands from critical habitat really was.  The Deputy Solicitor General did not reach the issue.

The most interesting part of the argument is what was not addressed: Chevron deference. Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), held that an agency’s formal interpretation of an ambiguous statute is entitled to deference and can be overturned only if the interpretation is unreasonable.  It has been a major factor in the rise of the administrative branch of the executive and several Supreme Court justices have called for its reconsideration.  But no one mentioned the doctrine.

The Court will likely issue an opinion early next year.

Coffee sellers in the State of California will now be required to provide cancer warnings on their coffee products. On March 28, 2018, a California State Court issued a Statement of Decision in a Proposition 65 (Prop 65) case that found that Starbucks and other retailers failed to prove that a chemical found in coffee poses no significant harm. Council for Education and Research on Toxics v. Starbucks Corporation, No. BC435759 (L.A. Super. Ct. Mar. 28, 2018).

Under California’s Prop 65, cancer warnings are required to appear on a wide range of products. In 2010, a nonprofit sued over 90 coffee sellers alleging that the companies failed to warn consumers regarding the presence of acrylamide in their coffee in violation of Prop 65. Acrylamide is listed as a chemical known to the State of California to cause cancer and reproductive toxicity and, consequently, products containing it are required to carry a warning. The chemical is created in certain plant-based foods during cooking, baking, frying, or roasting at high temperatures. Because acrylamide is also created during the cooking process for other foods, including potato chips, bread, french fries and roasted nuts, many of these products are arguably required to carry cancer warnings in California.

The court in the Starbucks case still has to rule on penalties the coffee sellers could face, but the decision exposes the defendants to significant fines: civil penalties of up to $2,500 per person exposed each day over eight years.

Contact us if you need help determining whether your products – coffee or otherwise – are covered by Prop 65, if you want assistance designing a Prop 65-compliant warning label for your products, or if you need legal counsel to address a Prop 65 60-day notice you’ve received.

Manufacturers, processors and formulators of ag chemicals should take note that the U.S. Environmental Protection Agency’s January 25 change to its “once in always in” policy will allow facilities that have historically been regulated as “major sources” of hazardous air pollutants to be reclassified as “area” sources if they have reduced their potential to emit to below major source thresholds. Read our Emerging Energy Insights blog post here covering the topic.

Since the Clean Water Act was passed in 1972, there has been extensive debate over which waters may be regulated as waters of the United States under the act. Yesterday, Bob Wilkinson explained how this issue came to a head in a recent 9th Circuit opinion and how, in response, EPA is requesting comments on whether pollutant discharges from point sources that reach jurisdictional surface waters via groundwater or other subsurface flow with a direct hydrologic connection to the jurisdictional surface water may be subject to regulation under the Clean Water Act. This is important to you because farmers, manufacturers, and anyone who conducts activities that release pollutants to groundwater will be affected by whether and how EPA clarifies its position regarding whether these discharges are subject to regulation. Our Environmental team blogged about this topic yesterday, please read more here.

Today, attorney Megan Caldwell blogged about two recent agency enforcement memoranda impacting the enforcement of environmental violations. You can read the blog post here. This is important to you, as it may change your company’s approach to compliance with certain agency guidance documents, as well as your emphasis on relationships with state environmental agencies versus U.S. EPA.

On February 17, 2017, and August 21, 2017, we blogged about this case. The U.S. Fish & Wildlife Service has designated certain land in Louisiana as critical habitat for the dusky frog, even though the frog does not currently inhabit that land and could not survive if it attempted to inhabit it. By an 8-6 vote, the Fifth Circuit upheld the government’s position.

On January 22, 2018, the Supreme Court granted Weyerhaeuser’s cert. petition. The petition did not raise any constitutional questions about the scope of the Endangered Species Act, so it is unlikely that the Court will rule on those issues. It could very well read the statute narrowly to avoid raising constitutional considerations.

On February 1, 2018, the U.S. Court of Appeals for the D. C. Circuit issued a stay delaying the implementation of a rule that will require farmers to estimate and report emissions from animal waste. Farmers will now have until at least May 1, 2018 before they are required to report their emissions to the U.S. Environmental Protection Agency (EPA).

Last April, the D.C. Circuit invalidated a rule that exempted livestock operations from reporting emissions of more than 100 pounds per day of either ammonia or hydrogen sulfide under CERCLA. Prior to the court’s decision, only animal feeding operations that qualified as concentrated animal feeding operations, or CAFOs, were required to report under the emissions reporting rule. Following the effective date of the new rule, an estimated 63,000 small- and medium-sized farms will also be required to estimate and report their emissions.

This is the third stay that the D.C. Circuit has issued at EPA’s request. EPA needs the additional time to inform farmers about the pending rule, provide guidance on calculating emissions, and finalize a reporting form specifically tailored to farmers. It is especially important that farmers understand their obligations under this new rule because, once the court issues the mandate, farmers that fail to report could face fines and suits from citizen groups alleging noncompliance.

Our environmental attorneys can help potentially affected farm owners and operators understand and meet these release reporting requirements. For more information on how these regulations may impact your operation, please contact Robert Wilkinson or Megan McLean of Husch Blackwell’s Environmental team.

On December 6 2017, the California Office of Environmental Health Hazard Assessment (OEHHA) issued a notice indicating the approval of amendments to Proposition 65’s “clear and reasonable warnings” regulations. OEHHA issued these amendments to clarify and correct certain sections of the significant new regulations going into effect August 30, 2018 that will change how parties in the supply chain for consumer products must warn their customers.

Under the Proposition 65 regulations, a manufacturer, distributor, or retailer of a consumer product sold in California must label the product with a clear and reasonable warning if the product contains one or more chemicals identified by OEHHA as causing cancer, or birth defects or other reproductive harm. Parties in the chain of distribution who fail to provide such warnings may become targets of State enforcement, or private lawsuits for penalties, injunctive relief, and attorneys’ fees. OEHHA has provided “safe harbor” warning language to be used in labeling.

Among other changes in the amendments, the definition of “label” was modified to clarify that a display of written, printed, or graphic material may be “printed” directly on a product or its immediate container or wrapper. Thus, there is no requirement to place a separate label with the warning on the product if the warning is printed on the product or the immediate container or wrapper.

The definition of “labeling” was also modified by adding a “package insert” as an acceptable form of “labeling.” This provision may be useful if it is not practical to apply a label directly to the product or package. The phrase “including tags at the point of sale or display of a product” was removed from the definition because it lacked clarity, because shelf tags are a form of signage and not labeling, and because shelf tags are not a clear and reasonable warning method for most product exposures because they are unlikely to be associated with the products to which they are referring. Sellers who have relied solely on shelf tags will need to evaluate other types of labeling, and all companies in the supply chain for California consumer products may benefit from re-evaluating their warnings in light of the new amendments.

Husch Blackwell’s environmental and consumer product regulatory attorneys can provide advice to our manufacturing and agricultural clients on how to comply with the Proposition 65 warning requirements, and assist in the defense of Proposition 65 claims. Contact Megan Caldwell, Charles Merrill, or Amy Wachs for more information.

We previously discussed the D.C. Circuit’s decision in Waterkeeper Alliance v. EPA, 853 F.3d, to strike down EPA’s regulation that exempted farms from air pollution reporting requirements for releases of hazardous substances from animal wastes. In October 2017, EPA petitioned the D.C. Circuit to stay the mandate in that case. On November 22, the D.C. Circuit granted EPA’s motion to stay the mandate until January 22, 2018.

The stay gives farmers an additional two months before they have to start reporting. It also provides an opportunity for farmers to familiarize themselves with EPA’s new guidance which helps farmers calculate emissions from beef, dairy, equine, swine and poultry operations.