Preview Newsletter
AM ACC 8/22/2016
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TSCA Reform Law Could Spur EPA, States To Increase Enforcement Efforts
Aug 19, 2016 | Inside EPA
By Bridget DiCosmo
Chemical industry officials and environmentalists are predicting a possible uptick in state and EPA enforcement of the reformed Toxic Substances Control Act (TSCA) given the broad new authorities that the agency received under the law, compared to the prior 1976 TSCA which spurred few regualtory actions that EPA could enforce. -
EPA Guide on Nominating High-Hazard Chemicals Imminent
Aug 22, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Interim guidance for companies that want to nominate a persistent, bioaccumulative and toxic chemical for risk evaluation will be issued soon by the Environmental Protection Agency. -
(ACC Mentioned) Exxon’s New Plastics Technology Set To Boost Petrochemical Sector
Aug 20, 2016 | Oilprice.com
By Erwin Cifuentes
Researchers from Exxon Mobil and the Georgia Institute of Technology unveiled a new form of plastics making that could reduce manufacturing costs and emissions. -
Ex-Regulators Back Obama In Fracking Rule Court Appeal
Aug 19, 2016 | The Hill - E2 Wire
By Timothy Cama
A bipartisan quartet of former high-level Interior Department officials is supporting the Obama administration in its federal court fight defending a regulation on hydraulic fracking. -
Can Sewage Sludge Replace Coal At Power Plants?
Aug 20, 2016 | Pittsburgh Post-Gazette (In Fuel Fix)
By Anya Litvak
Casella Organics, which finds uses for organic wastes that don’t involve shoveling the stinky stuff into landfills, has told Pennsylvania regulators it wants to dry sewage sludge into pellets and bring them into Pennsylvania to be used as fuel at coal-fired power plants. -
What Does a Corporation Have to Know to Be Guilty of a Crime? The Conviction of PG&E Based on Corporate Collective Knowledge
Aug 22, 2016 | BNA Daily Environment Report
By Steven P. Solow and Mark L. Farley
Pacific Gas & Electric Co. (PG&E) was convicted Aug. 9 of five counts of violating the federal Pipeline Safety Act (PSA) and one count of obstructing the National Transportation Safety Board (NTSB) investigation into a 2010 pipeline explosion in San Bruno, Calif. -
Railroads And Denham Deliver On Safety
Aug 19, 2016 | The Modesto Bee
By Lisa Stabler
Freight railroads continue to make news in California, home of several policymakers that oversee the sector – including Modesto’s U.S. Rep. Jeff Denham. -
EPA Would Prefer Settlement in Texas Haze Case, Experts Say
Aug 22, 2016 | BNA Daily Environment Report
By Paul Stinson
The Environmental Protection Agency would rather work toward a settlement in the Texas haze rule than absorb an unpalatable precedent, an environmental attorney told Bloomberg BNA. -
Fossil Fuel Phaseout Repeal Gets Business Backing
Aug 22, 2016 | BNA Daily Environment Report
By Ari Natter
A provision in House and Senate energy legislation that would repeal a requirement that federal buildings phase out the use of fossil fuel has the backing of the National Association of Manufacturers and other business groups.
Congressional Hearings - There are no relevant hearings to report at this time
Industry and Association News - There are no relevant clips to report at this time
LCSA News
Chemical Management News - There are no relevant clips to report at this time
Energy News
Chemical Security News - There are no relevant clips to report at this time
Transportation News
Environment News
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TSCA Reform Law Could Spur EPA, States To Increase Enforcement Efforts
Aug 19, 2016 | Inside EPA
By Bridget DiCosmo
Chemical industry officials and environmentalists are predicting a possible uptick in state and EPA enforcement of the reformed Toxic Substances Control Act (TSCA) given the broad new authorities that the agency received under the law, compared to the prior 1976 TSCA which spurred few regualtory actions that EPA could enforce.
“New rules, new responsibilities, mean new opportunities to mess up,” says one chemical industry source, who adds that “There is definitely going to be more enforcement in the future” but it will likely be two or three years before EPA implements enough of the new law's mandates to begin targeted enforcement actions.
Separately, an environmentalist says, “it's hard to know” how enforcement may play under the revised law, since EPA under the prior version of TSCA rarely took new regulatory actions on existing chemicals. Now the agency has a mandate to review existing chemicals to ensure they do not present an unreasonable risk. “There's more for them to enforce,” but the extent of enforcement will largely depend on compliance, that source says.
President Obama signed the law June 22, giving EPA extensive new authorities to test and regulate new and existing chemicals in commerce, and the authority to establish a fee system to partially fund the new mandates.
Sources say that the new mandates could potentially lead to reinvigorated state and EPA enforcement of the law, especially given that the revised statute includes a provision that allows states to “co-enforce” TSA provisions with the agency provided the combined penalty does not exceed the federal maximum penalty.
One former EPA official says “we could see an uptick in enforcement actions” under a planned “reset” of the agency's inventory of chemicals manufactured or processed, including imports.
The TSCA inventory, established under section 8 of the original statute, had an initial reporting period of January to May 1978 for chemicals that had been in commerce since January 1975. The list was first published in 1979, with a second version containing about 62,000 chemical substances published in 1928, according to EPA's website. “The TSCA Inventory has continued to grow since then, and now lists about 85,000 chemicals,” EPA says.
The TSCA reform statute requires the agency to develop a proposed reporting rule that could potentially lead to changes of its listing of existing chemicals that are either active or inactive in commerce.
The source says because of the way the TSCA inventory is constructed, there could potentially be a violation of the program if companies have been manufacturing chemicals that might be similar to something already in the inventory but not identical, resulting in a discrepancy over whether it qualifies as a new substance.
Statutory Requirements
A third industry source says that one area that is likely to present the most significant opportunity for enforcement could be failures to report under section 8(e), which requires that EPA be immediately notified when substances or mixtures present a substantial risk of injury to health or the environment.
The source says that with the new law's provision on reviewing existing chemicals, part of that process will involve EPA soliciting health and safety data under its new authority under section 4, which governs safety testing. The process of collecting that data could lead to enforcement in cases where EPA disagrees with a company on whether past data rose to the level of reporting under section 8(e), the source says.
There could also be opportunity for stepped-up enforcement under section 13 of the revised law, which covers import certification. The new law mandates review of existing chemicals and affirmative safety findings for new chemicals that will increase the number of rules and regulations under section 5, which outlines requirements for new chemicals, and section 6, which governs existing chemicals.
A fourth industry source says that while the TSCA reform efforts did not include a "big enforcement push," there were some updates to the penalty provisions that could be used in such efforts.
The updates include adjusting the penalty amounts for inflation; adding a provision for criminal penalties for knowing and willful violations of the law that place someone in imminent danger of death or serious bodily injury; and limiting the combined penalty amount when both states and EPA enforce identical requirements. The total of such dual enforcement actions would not be allowed to exceed the federal maximum penalty.
Potential Enforcement
The fourth industry source also notes that -- separate from the reform law -- TSCA's electronic reporting requirements have steadily increased over recent years. These increased mandates could lead to enhanced enforcement consistent with the agency's growing focus on “Next Generation Compliance,” an integrated strategy to modernize its approach to compliance, which emphasizes increased electronic reporting.
On the idea of increased state and federal enforcement, a second former EPA source points out that while environmental enforcement often includes penalty sharing, it is not generally dictated by the statute.
For example, under the Clean Water Act, in many cases the penalty levied on a violator is well below the statutory maximum. "TSCA is a little bit different because the penalty could be a significant fraction of the total settlement," since much of the relief involves simply getting back into compliance, the source says.
The environmentalist says that because the new law means states will be able to obtain confidential business information (CBI) from chemical companies, “we may see more enforcement at the state level,” given that they have access to CBI and may co-enforce TSCA provisions under the new law.
http://insideepa.com/daily-news/tsca-reform-law-could-spur-epa-states-increase-enforcement-efforts
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EPA Guide on Nominating High-Hazard Chemicals Imminent
Aug 22, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Interim guidance for companies that want to nominate a persistent, bioaccumulative and toxic chemical for risk evaluation will be issued soon by the Environmental Protection Agency.
“EPA is working on interim guidance and plans to issue that guidance very soon,” the agency said in an Aug. 19 e-mail to Bloomberg BNA.
“Because the law requires that manufacturers or importers that make these requests pay a fee, revised guidance will be issued after the fee rule is finalized,” the agency said.
The guidance will address a particular provision of the Toxic Substances Control Act as amended June 22 by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Pub. Law No. 114-182).
Expedited Action Unless Nominated, Selected by EPA
Under that provision, Section 6(h)(5) of amended TSCA, chemical manufacturers and importers have until Sept. 20 to nominate—for a full risk evaluation–highly persistent, bioaccumulative and toxic chemicals that already are listed on the agency's work plan. That work plan lists about 90 chemicals the EPA said it would evaluate in 2014.
Nine work-plan chemicals could be covered by this provision of the Lautenberg Act, according to achart prepared by Beveridge & Diamond PC as part of a broader analysis of the TSCA amendments the law firm published June 2.
Under Lautenberg, companies would have to pay 50 percent of the risk evaluation fees if they nominated one of these chemicals for a full risk evaluation.
Unless nominated by companies within 90 days of enactment or selected by the EPA to be among the first 10 chemicals it will evaluate, highly persistent, bioaccumulative and toxic chemicals will get what the law calls “expedited action.”
Expedited action means the agency will analyze the chemicals use and exposure, but not their hazard, which is presumed to be high because of their inherent capacity to persist, bioaccumulate in wildlife and be toxic to humans.
Expedited action also means that the EPA—if it concludes the chemicals could injure people or the environment—must “reduce exposure to the substance to the extent practicable” according to TSCA Section 6(h)(4).
Law's Earliest Deadline for Industry Action
The guidance the EPA will issue is of particular interest to chemical manufacturers, because it will address the earliest deadline the amended law imposes on industry if a company or consortia maintain the agency has overestimated the persistence, bioaccumulation or toxicity of a chemical, Mark Duvall, an attorney with Beveridge & Diamond told Bloomberg BNA Aug. 19.
Nominating one of these chemicals for a full risk evaluation is the only statutory mechanism to ensure that the EPA may conduct that more complete analysis, Duvall said. The nomination does not guarantee that EPA will conduct the risk evaluation, he added.
Nominating the chemicals within the law's 90-day deadline, however, means that companies have to take action before the EPA has taken any of several critical actions:
• determining risk evaluation fees;
• determining the process for risk evaluations; and
• issued guidance on the types of data that companies should use when submitting information including risk evaluations they want the agency to act upon.
Some Questions for EPA
Duvall listed a few of the questions industry would like the EPA's forthcoming guidance to answer:
• If a company nominates a chemical for risk evaluation, but only makes that chemical for particular uses, will it have to pay the agency's costs of evaluating other uses of the chemical in markets in which it doesn't sell?
• Following a nomination, would EPA give diverse interested parties time to encourage the agency to take up or dismiss the request?
• Could a company or group of companies withdraw the nomination after making it?
Duvall said Jeffrey Morris, deputy director for programs at the EPA told participants in a Small Business Administration roundtable Aug. 19, that the interim process the agency will allow companies to put a “marker” in designating their interest in a particular chemical.
EPA did not immediately reply to a Bloomberg BNA question as to whether companies' Sept. 20 nomination would be a statement of interest in a chemical or a pledge to pay for the risk evaluation.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=96018134&vname=dennotallissues&fn=96018134&jd=96018134
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(ACC Mentioned) Exxon’s New Plastics Technology Set To Boost Petrochemical Sector
Aug 20, 2016 | Oilprice.com
By Erwin Cifuentes
Researchers from Exxon Mobil and the Georgia Institute of Technology unveiled a new form of plastics making that could reduce manufacturing costs and emissions.
The new system, which was published in the academic journal Science on Thursday, would purportedly save the petrochemicals industry US$2 billion, and lower the emissions equal to the emissions from about 5 million U.S. homes.
“In effect, we’d be using a filter with microscopic holes to do what an enormous amount of heat and energy currently do in a chemical process similar to that found in oil refining,” said Mike Kerby, corporate strategic research manager at Exxon Mobil, in a prepared statement cited by FuelFix.
More testing is needed, but Exxon Mobil is confident with the results thus far and is interested in pursuing the technology for a broader global implementation.
The petrochemicals industry in the U.S. has undergone a boom following the spike in fracking that began nearly a decade ago. This has created increased development of infrastructure in several U.S. Gulf states including planned and future projects, which the American Chemistry Council estimates will create around 70,000 jobs. One of these plans was announced last month by Exxon Mobil and the state-owned Saudi Arabia Basic Industries Corp. for the construction of a multibillion-dollar petrochemical complex either in Texas or Louisiana.
Related: Merrill Lynch Expects A 46% Jump In Oil Prices By June 2017
The plentiful and inexpensive amount of natural gas extracted via fracking has made it more affordable for the manufacturing of plastics. (The price of U.S. ethylene, which is the primary building block for most plastics, reached a thirteen-month peak partly due to Exxon Mobil’s rumored plans to restart its 989,000 metric tons per year ethylene plant in Baton Rouge).Research firm IHS estimates more than 24 million metric tons of new polyethylene capacity, which equals 25 percent of global consumption, is due to come online by 2020. About 8 million metric tons of the new production will come from the U.S., including the promising Gulf region.
While the main goal is for U.S. plastics manufacturing to supply much of the developing world, the reduced costs in making plastics from cheap oil and gas have already had a major impact on one specific U.S. industry. Plastic recycling has reportedly become far less cost-effective as around 200 scrap-recycling companies have gone out of business in recent years. Local governments seek ways to cut costs with their recycling programs including renegotiating contracts with recycling firms.
http://oilprice.com/Latest-Energy-News/World-News/Exxons-New-Plastics-Technology-Set-To-Boost-Petrochemical-Sector.html
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Ex-Regulators Back Obama In Fracking Rule Court Appeal
Aug 19, 2016 | The Hill - E2 Wire
By Timothy Cama
A bipartisan quartet of former high-level Interior Department officials is supporting the Obama administration in its federal court fight defending a regulation on hydraulic fracking.
The officials — who served under presidents Clinton, George W. Bush and Obama — said a Wyoming judge was wrong in June when he struck down Interior’s fracking regulation and ruled that the department's Bureau of Land Management (BLM) does not have authority to regulate the process at all.
“Congress has enacted broad organic statutes that govern mineral leasing and federal land management, and authorize the Bureau of Land Management to regulate oil and gas drilling activities on the public lands,” the former officials wrote in a brief to the Denver-based 10th Circuit U.S. Court of Appeals. The federal judges are hearing an appeal by Obama lawyers and environmental groups seeking to reverse the Wyoming judge’s decision.
“Under these statutes, the BLM has for decades specified operational requirements for lessees engaged in oil and gas drilling activities. The hydraulic fracturing rules are simply the latest manifestation of this well-established authority,” they said.
Judge Scott Skavdahl, who Obama appointed, wrote in his ruling that Congress acted in 2005 to exempt fracking from provisions the Safe Drinking Water Act, therefore blocking the BLM’s authority to regulate.
But the former Interior officials said the 2005 law only blocked Environmental Protection Agency authority.
“Indeed, the legislative history of the Safe Drinking Water Act, which the district court found ousted the Interior Department’s authority, specifically states that Congress did not intend through that Act to limit or repeal any of the Department’s authority, including authority ‘to prevent groundwater contamination under the Mineral Leasing Act,’” they said, citing a House committee report from the 2005 law.
Signing on to the Friday brief were James Caswell, a Bureau of Land Management (BLM) head under Bush; David Hayes, a deputy interior secretary under Clinton and Obama; Michael Dombeck, an acting BLM director under Clinton; and Lynn Scarlett, a deputy Interior secretary under Bush.
The BLM regulation, made final last year after years of development, set standards for oil and natural gas well construction, containment of waste fluid and disclosure of chemicals used to frack. It applies only to wells on federal and American Indian land.
http://thehill.com/policy/energy-environment/292038-ex-regulators-back-obama-in-fracking-rule-court-appeal
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Can Sewage Sludge Replace Coal At Power Plants?
Aug 20, 2016 | Pittsburgh Post-Gazette (In Fuel Fix)
By Anya Litvak
A Maine company has set its sights on Pennsylvania as a good place to burn poop.
Casella Organics, which finds uses for organic wastes that don’t involve shoveling the stinky stuff into landfills, has told Pennsylvania regulators it wants to dry sewage sludge into pellets and bring them into Pennsylvania to be used as fuel at coal-fired power plants.
This would be Casella’s first foray into the biosolids-as-powerplant-fuel concept and it comes from the company’s desire to diversify, said Jen McDonnell, director of sales and marketing.
Most of its biosolids are applied to land as fertilizer or for other purposes, she said. Commercial dryers in the Northeast can get most of the water out of sludge. Cement kilns, which use a lot of energy, have used this kind of material as fuel, she said, and the company wanted to know if it would make economic and technical sense to develop a product line for coal-fired power plants.
“I think the objective is to make it attractive to an industry as an alternative (fuel),” she said. “You want to be able to compete with whatever fuels are out there.”
McDonnell said she doesn’t know if the emissions from biosolid burning would be more or less than those from coal alone.
“That’s part of what we have to find out in the permitting process,” she said, “If we can get through this pathway when everybody is comfortable with trying it as a fuel, then we can look closer at some of these opportunities.”
The Pennsylvania Department of Environmental Protection is reviewing Casella’s application to transport the biosolids into the state. It would be up to the power plants to apply for a permit to burn the stuff. Currently, there are no facilities permitted to do that, the DEP said.
McDonnell said Casella has talked to some power plant operators but doesn’t have any contracts in hand yet. “With these new ideas, it’s really one step at a time,” she said.
In Pennsylvania, unlike in some states that have restricted the practice, spreading sewage sludge biosolids on land is still an option, said Ed Johnstonbaugh, a renewable energy educator with Penn State Extension-Westmoreland.
For it to be worthwhile to transport biosolids, they have to be packed with enough heat content to override the cost or there must be other incentives for the fuel, he said.
“The only potential for something like that is if they can get it classified as a renewable fuel,” he said.
Pennsylvania has alternative fuel standards that require utilities to get an increasing amount of their electricity from renewable and other sources, such as waste coal, biomass, and landfill gas. It’s not clear how the state would treat biosolids from sewage sludge.
Nils Hagen-Frederiksen, a spokesman for the Pennsylvania Public Utility Commission which administers the state’s alternative energy portfolio standards, said no one has tried to claim biosolids as an alternative fuel yet, but if someone wants to argue it fits under the biomass category of an alternative fuel, they can petition the PUC.
McDonnell said Casella might explore that route.
A few years ago, Michigan-based DTE Energy approached the Allegheny County Sanitary Authority about using its biosolids as fuel in coal plants, said Douglas Jackson, director of operations and maintenance.
Jackson said he believes it was the alternative fuel standards that piqued DTE’s interest. “They had some coal-fired units and they were looking for sources of biosolids,” he said.
The conversations were brief and never went anywhere, he said.
Alcosan produces 110,000 tons of biosolids each year, and sends about half of that to be applied to land for agricultural and reclamation purposes once it’s blended with lyme. The rest it burns in its incinerator, which produces steam to heat the facility and ashes sent to a landfill.
Its biosolids are still about 70 percent water, Mr. Jackson said. They would need to be further solidified in an industrial dryer to be compatible as a fuel for coal plants, he said. That would add the cost of transporting the sludge and the energy-intensive expense of drying it.
That’s partly why the U.S. Environmental Protection Agency places waste-to-energy just above using a landfill in the hierarchy of what to do with waste. The more preferred options are reducing the amount of waste, recycling it or using it as compost.
While Alcosan hasn’t had the need to look for disposal options beyond its current mix, Jackson said understands why other wastewater treatment operators might be looking to diversify.
The supply is constantly increasing. “It’s coming in 24-7,” he said.
McDonnell said Casella’s venture into Pennsylvania and into biosolids as fuel in general is still in its infancy.
“It’s early. We’ll see where it goes,” she said. “I think there’s a huge need and opportunity to innovate in our industry.”
http://fuelfix.com/blog/2016/08/20/can-sewage-sludge-replace-coal-at-power-plants/
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Aug 22, 2016 | BNA Daily Environment Report
By Steven P. Solow and Mark L. Farley
Steven P. Solow is a partner in the Washington office of Katten Muchin Rosenman LLP, where he serves as co-chair of the firm's National Environmental and Workplace Safety Practice Group and co-chair of the D.C. office's White Collar Criminal and Civil Litigation and Compliance Practice. He is a former chief of the Department of Justice Environmental Crimes Section.
Mark L. Farley is co-chair of Katten's National Environmental and Workplace Safety Practice Group and in the last 20 years has advised on the most significant refinery accidents in the US. He advises clients on a wide range of environmental, health and safety issues, and focuses on internal investigations and crisis response in connection with major industrial accidents, whistleblowers, process safety incidents and workplace fatalities.
Pacific Gas & Electric Co. (PG&E) was convicted Aug. 9 of five counts of violating the federal Pipeline Safety Act (PSA) and one count of obstructing the National Transportation Safety Board (NTSB) investigation into a 2010 pipeline explosion in San Bruno, Calif. (United States v. Pac. Gas & Elec. Co., N.D. Cal., 2016 BL 240175, No. 3:14-cr-00175, 8/9/16). This case is significant to a wide range of corporate regulatory prosecutions for its use of corporate collective knowledge, a largely unused basis for imposing corporate criminal liability at trial. Traditionally, under the respondeat superior doctrine, a corporation may be held liable for the illegal actions of an employee acting within the scope of his or her employment for the benefit of the company (N.Y. Cent. & Hudson River R.R. v. United States, 212 U.S. 481 (1909)). The theory of corporate collective knowledge, however, seeks to aggregate pieces of knowledge held by different employees, and impute the totality of that knowledge to the corporation as a basis for imposing criminal liability on the company (United States v. Bank of New England, N.A., 821 F.2d 844, 856 (1st Cir. 1987)). Notably:
• The case is the first time the U.S. Department of Justice has successfully prosecuted a company under a theory of corporate collective knowledge in nearly 30 years.
• The case includes jury instructions that may have led the jury to convict PG&E for a knowing and willful violation based on the collective knowledge of the company's employees and without evidence that any single employee acted willfully.
• The case appears to conflict with Deputy Attorney General Sally Yates's September 2015 directive—also known as the “Yates memo”—to hold individuals accountable for corporate wrongdoing.
• The case up-ends traditional principles of corporate vicarious liability by allowing the government, as the defense argued in its motion to dismiss because of erroneous legal instructions to the grand jury, to “aggregate the innocent conduct of (unnamed) employees to manufacture a corporate criminal.”
The prosecution of PG&E followed the Sept. 9, 2010, rupture of a natural gas transmission line owned and operated by the company. The resulting fire killed eight people, injured 58 others, and damaged numerous homes. In 2014, PG&E was charged with criminal regulatory violations of the PSA and with criminal obstruction of the NTSB investigation that was launched soon after the incident. While the impetus for the case was the San Bruno explosion, the court instructed the jury that:
“[T]here is no allegation in this case and there has been no evidence in this case that any alleged regulatory violation caused the San Bruno explosion. Such evidence had no place in this criminal prosecution, because this case is not about the cause of the San Bruno explosion, and you are not tasked with determining what did or did not cause that explosion.”
The indictment alleged that PG&E knowingly and willfully violated PSA regulations by: (1) failing to keep records of pressure testing and repairs on natural gas transmission lines, (2) relying on erroneous and incomplete information when evaluating the integrity of natural gas transmission lines, (3) failing to identify and evaluate potential threats to the integrity of the lines and (4) failing to prioritize lines as high risk after a changed circumstance.
The indictment also alleged that PG&E obstructed the NTSB's investigation based on an April 6, 2011, letter, in which the company stated that its Integrity Management Plan, which allowed for a 10 percent increase in maximum operating pressure before a line was considered to be unstable, had not been officially adopted. The government alleged that the 10 percent allowance was in effect at the time of rupture.
With the jury's decision, PG&E now faces a maximum penalty of $3 million for the six counts for which it was convicted, which is far less than the company faced under the 28 counts charged in the original indictment and under the government's allegation under the Alternative Fines Act for penalties in excess of the statutory maximum for the PSA counts. The court dismissed 15 PSA counts before trial for multiplicity, while the government dismissed one PSA count during trial and the Alternative Fines Act allegations post-trial.
This case is particularly noteworthy because the government prosecuted PG&E under a theory of corporate collective knowledge with respect to the PSA violations, according to the jury instructions filed in the case. At the start of the case, PG&E challenged this theory in a motion to dismiss the indictment for erroneous instructions to the grand jury. The company argued that the prosecutor incorrectly instructed the grand jury that they could issue an indictment for a knowing and willful violation based on a regulatory duty to act and evidence that employees of the company knew that the regulatory duty was not being met.
The trial judge denied the motion, relying on a 1974 case out of the U.S. District Court for the Western District of Virginia in which the court applied a theory of corporate collective knowledge to establish a knowing and willful violation of a federal regulation pursuant to a statute that provided criminal liability for such infractions, similar to the PSA (United States v. T.I.M.E.-D.C., Inc., 381 F. Supp. 730, 738 (W.D. Va. 1974)). In T.I.M.E., the court found that the company had sufficient information available through various employees regarding violation of the applicable regulation to support imputation of knowledge. Given such knowledge, the court found that the company's “hands-off” approach to compliance with the regulation was sufficient to establish “willfulness.” The court did not require evidence that a specific employee demonstrated willful intent, or acted willfully, only that the company's compliance program was less than robust in the face of imputed knowledge of regulatory violations.
Here, in the final instruction to the jury on the PSA counts, the court instructed that: “The corporation is … considered to have acquired the collective knowledge of its employees. The corporation's ‘knowledge’ is therefore the totality of what its employees know within the scope of their employment.” This instruction, which is based on Bank of New England (a 1987 decision regarding cash transaction reporting), has not been widely accepted in prior prosecutions. The court further instructed that: “The willfulness of corporate employees acting within the scope of their employment is imputed to the corporation. Accordingly, if a specific employee acted willfully within the scope of his or her employment, then the corporation can be said to have acted willfully.”
At first blush, these instructions appear confusing.
• First, it is not clear what was intended by the use of the plural “employees” in “[t]he willfulness of corporate employees acting within the scope of their employment is imputed to the corporation.” It stands to reason that willfulness cannot be broken across multiple individuals (i.e., one cannot be a “little bit” willful). The context of this instruction is important because it immediately followed the instruction on corporate collectiveknowledge, which may have led the jury to conclude that the court was instructing them on a separate doctrine of corporate collective willfulness.
• Second, adding another layer of complexity, the relationship between the “knowingly” mental element of the statute and the “willfully” mental element of the statute is not clear in the instruction. Was the court suggesting that the “knowingly” element could be established by “corporate collective knowledge,” but that the “willfully” element required a single employee with specific intent? Could this employee be a separate employee from those in the pool that the held the “collective knowledge” imputed to the company?
PG&E has filed a motion for a judgment of acquittal, arguing that the government failed to present sufficient evidence to establish that any single employee acted willfully. If this motion is unsuccessful and PG&E appeals the conviction, the company will no doubt challenge the government's theory of corporate liability before the Ninth Circuit. Should that occur, no matter how the court decides the case, its decision is likely to have a significant impact on the future of corporate criminal prosecution.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=96018112&vname=dennotallissues&fn=96018112&jd=96018112
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Railroads And Denham Deliver On Safety
Aug 19, 2016 | The Modesto Bee
By Lisa Stabler
Freight railroads continue to make news in California, home of several policymakers that oversee the sector – including Modesto’s U.S. Rep. Jeff Denham.
BNSF has promised to move forward with a more than $500 million terminal development in Southern California despite a judge’s ruling against the plan. Likewise, some of the biggest railroads operating in the state recently fought back against a misguided and unprecedented state measure to fine the movement of goods we all use every day, like chlorine that treats our water, liquid fertilizer that helps grow crops or oil that fuels multiple transportation modes.
Some California residents and local elected officials seem to believe railroads are not safe enough to pass through their communities on a regular schedule.
Yet, the data paints a different picture, and from my view in Pueblo, Colo., where we run the world’s most expansive railroad testing center (which Rep. Denham will visit this month), the innovation surrounding the sector would turn doubters into believers. The profound economic impact of railroads, supported by smart public policies and massive private investment, only furthers the vast benefits of the industry.
Consider first, safety data from the Federal Railroad Administration (FRA) that shows rail safety has been dramatically improving over the last three decades. The train accident rate is down nearly 40 percent over the last 16 years, while employees are injured nearly 50 percent less today than in 2000. For the transportation of those very goods that some California policymakers seek to fine or altogether eliminate, the industry moves them safely 99.999 of the time.
Then consider the relentless efforts to improve upon this record, many of which Rep. Denham will witness while in Colorado. The industry is studying or has implemented safety measures like drones to supplement manual track and bridge inspections, trackside technology that performs a real time X-ray of railroad infrastructure to identify flaws, as well as big-data-sourcing to predict trends. More tangibly, the industry initiates countless training sessions for first responders, bringing emergency managers to Pueblo while also taking sessions throughout the country to help those unable to get to Colorado.
Rep. Denham and his colleagues in Congress also helped advance landmark legislation just last year that will further help improve safety. The Fixing America’s Surface Transportation (FAST) Act included safety enhancements like requiring increased thermal blankets and restrictions on the use of older tank cars moving flammable liquids. Rep. Denham fought tirelessly for this measure, which he knew would help those in the Central Valley feel more secure when trains moved through their towns.
All the while, new data presented from a Towson (Maryland) University study shows investments of major U.S. railroads created nearly $274 billion in economic activity while supporting approximately 1.5 million jobs and $88 billion in total wages across the country in 2014.
Freight railroads also spent almost $28 billion in 2014 to maintain and modernize their network. These efforts create a ripple effect in communities like Modesto, Riverbank and Patterson, providing revenue for government to fund social programs, supplying materials for manufacturers to create goods sold by local businesses. Freight trains also provide the vast majority of infrastructure for passenger railroads, which further reduce gridlock.
While trains might seem like disconnected entities, they impact Americans every day.
Safe railroads keep California and the U.S. running. Progress is always fluid and railroads will continue to modernize and invest in safety. Despite widespread misinformation, the industry is safe and we look forward to showing Rep. Denham all the things we are doing to be safer.
Californians and citizens across the country must understand the power of this transportation mode to forego misguided proposals – like the tax on hazardous materials – that disregards how railroads help make life better. The industry asks public leaders to do their part and applauds Rep. Denham for his tireless work.
http://www.modbee.com/opinion/state-issues/article96715277.html#storylink=cpy
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EPA Would Prefer Settlement in Texas Haze Case, Experts Say
Aug 22, 2016 | BNA Daily Environment Report
By Paul Stinson
The Environmental Protection Agency would rather work toward a settlement in the Texas haze rule than absorb an unpalatable precedent, an environmental attorney told Bloomberg BNA.
Talks between the federal agency and Texas are under way following the joint Aug. 17 motion to accommodate a 90-day stay of proceedings in order to allow settlement discussions through Nov. 28 (Texas v. EPA, 5th Cir., No. 16-60118, 8/17/16.
The court Aug. 19 issued a notice saying the motion was granted.
“I can imagine the EPA saying: ‘We really don't want any further proceedings in this … it's not going to end well,’ said Seth Jaffe, an environmental and administrative attorney at Foley Hoag LLP in Boston.
Speaking by phone from Boston, Jaffe took stock of the July stay of the EPA's federal plan for the Texas regional haze rule by the U.S. Court of Appeals for the Fifth Circuit.
“Certainly looked to me like it's pretty clear what the final decision is going to be,” he said.
EPA Precedent Concerns?
“There are a couple of issues that they could be worried about precedential effect on,” Jaffe said.
A representative of the Texas Association of Business told Bloomberg BNA he echoed Jaffe's assessment of EPA concerns following the Fifth Circuit decision.
“I would agree with the precedent issue,” said Stephen Minick, the association's vice president of governmental affairs.
“A stay is not very common, and usually signals a very strong argument on behalf of petitioners,” said Minick in an Aug. 19 e-mail.
“I have to assume that EPA is concerned that the legal or procedural basis for the regional haze stay does not become a precedent that other jurisdictions (other federal appeal courts, etc.) adopt, thereby expanding its implications beyond Texas and Oklahoma or the 5th Circuit,” he said.
“It could be that EPA may simply feel that a fight over an issue related to these two states and what some would argue are some small technical differences between the state and federal plan is just not worth the risk,” Minick said.
Asked to identify particular areas of EPA concern, Jaffe specified the federal agency would not want any further discussion of the source specific analysis issue and the time frame as it relates to what's covered by the rule.
“Also, if their ultimate objective is to force the closure of coal-fired power plants, it is not as if that objective is not also the goal of other, higher-profile EPA regulatory initiatives,” said TAB's Minick.
Responding to the filing, a Texas representative of the Sierra Club said the organization “has always been open” to resolving disputes outside of litigation, saying it had a “proud” history of settlements “achieved” with power and coal entities.
“Sierra Club has of course reserved its right to continue defending EPA's haze plan in court if it is not satisfied that a settlement would achieve positive results to clean up pollution from coal-fired power plants in Texas,” Chrissy Mann, senior organizing representative for the Sierra Club's Beyond Coal campaign, said in an Aug. 17 statement.
Offering up reasons as to why Texas would want to come to the table, Jaffe stressed the presence of long-term incentives for finding a space for settlement even if the federal agency seemed on course for legal defeat.
“You know, the EPA still has a lot of authority,” Jaffe said. “This rule may not have passed muster but they could still be worried that EPA would go back to the drawing board and do something that would satisfy the court but that would still be onerous as far as Texas were concerned.”
“So, even though they won pretty big, there's certainly reason enough for them to come to the table and talk, so I can understand motivations for both,” he said.
Texas and federal officials highlighted the fruits of cooperation between Texas and the Environmental Protection Agency during a recent environmental conference in Austin, pointing to the progress made in easing a backlog of greenhouse gas emissions permits.
Representatives for the Texas Attorney General's office and energy companies told Bloomberg BNA they had no comment.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=96018133&vname=dennotallissues&fn=96018133&jd=96018133
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Fossil Fuel Phaseout Repeal Gets Business Backing
Aug 22, 2016 | BNA Daily Environment Report
By Ari Natter
A provision in House and Senate energy legislation that would repeal a requirement that federal buildings phase out the use of fossil fuel has the backing of the National Association of Manufacturers and other business groups.
Environmental groups such as the Sierra Club oppose the measure. But in a letter sent Aug. 19 to energy bill conferees, companies including United Technologies and Ingersoll Rand said the repeal was a priority they supported.
The phaseout requirement, enacted in a 2007, mandates that all new and significantly renovated federal buildings phase out the use of fossil energy by 2030. Both the House and Senate bills (H.R. 8, S. 2012) increase federal energy efficiency requirements in its stead.
“We support this package and note that energy efficiency remains fuel neutral; therefore any effort to become more efficient will also reduce emissions,” said the letter, which was signed by groups such as the U.S. Chamber of Commerce and the Alliance to Save Energy.
The groups also expressed support for other energy efficiency provisions in the legislation, including language in the Senate bill extending energy-reduction goals for the federal government for 10 years.
The fossil fuel phaseout, which groups such as the American Gas Association also oppose, could cost more than $1 billion in higher construction and energy costs, according to an Energy Department analysis.
Critics of the requirement said it is technologically unfeasible, and the Energy Department has yet to finalize a proposed version of the rule issued in 2010, the year the fossil fuel phaseout was supposed to begin.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=96018124&vname=dennotallissues&fn=96018124&jd=96018124
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