Written by John McGahren, Stephanie R. Feingold, Ariel Kapoano, and Jenna Ferraro, Morgan, Lewis & Bockius LLP
Business closures and remote work requirements, work stoppages, travel restrictions, state and federal government slowdowns, and supply-chain disruptions are impacting parties’ abilities to satisfy obligations pursuant to environmental settlements, including administrative consent orders or judicial consent decrees with the US Environmental Protection Agency (EPA), and administrative orders with various state environmental agencies as well as compliance obligations under federal environmental laws such as the Clean Air Act, Clean Water Act, and Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
Although the CDC has released guidelines recommending work from home and social distancing, there are currently no federal mandates or executive orders requiring business shutdowns or mandatory quarantine. Instead, many states, counties, and municipalities are releasing executive orders as well as nonbinding policies ranging from shelter-in-place to closing nonessential businesses and limiting gatherings of people.
These state and local mandates uniformly exempt “essential businesses” from such directives. The “essential business” exemption includes services and sectors that promote public safety, health, and welfare, although exactly what constitutes an “essential business” can vary. For example:
New York: Executive Order 202.6 exempts “essential businesses” to include healthcare operations (including research and laboratory services); essential infrastructure (including utilities); telecommunication; airports and transportation infrastructure; essential manufacturing (including food processing and pharmaceuticals); essential retail (including grocery stores and pharmacies); essential services (including trash collection, mail, and shipping services; news media; banks and related financial institutions); providers of basic necessities to economically disadvantaged populations; construction; vendors of essential services to maintain the safety, sanitation and essential operations of residences or other essential businesses; and vendors that provide essential services or products (including logistics and technology support, child care, and services needed to ensure the continuing operation of government agencies and provide for the health, safety, and welfare of the public).
New Jersey: Executive Order No. 104 exempts “essential businesses,” defined to include “grocery/food stores, pharmacies, medical supply stores, gas stations, healthcare facilities and ancillary stores within healthcare facilities.” All gatherings within the state are limited to 50 persons or fewer, except for “normal operations at airports, bus and train stations, medical facilities, office environments, factories, assemblages for the purpose of industrial or manufacturing work, construction sites, mass transit, or the purchase of groceries or consumer goods.”
It is less clear, however, whether environmental cleanups and investigations would constitute “essential businesses” subject to these exemptions. Furthermore, some states have expanded their initial executive orders, and others may follow suit. For example, while Pennsylvania initially recommended the closure of nonessential businesses, on March 19 Governor Tom Wolf signed an executive order forcing the closure of all but “life-sustaining” businesses. The state will begin enforcement actions against noncompliant businesses on March 21 under the terms of this order. Construction activities, for example, are no longer permitted to operate in Pennsylvania. Additionally, on March 19, Governor Gavin Newsom of California signed an executive order requiring all residents to stay home, except as needed to maintain continuity of operations of the 16 “federal critical infrastructure sectors” including critical manufacturing, chemical, emergency services, energy, healthcare and public health, financial services, food and agriculture, and water and wastewater. And on March 20, just one day after having directed 75% of all nonessential employees to stay home, New York Governor Andrew Cuomo announced that he would be putting out an executive order mandating that 100% of employees in “nonessential” businesses in the state stay home.
Many state environmental agencies have not yet released guidance on the impacts of COVID-19. Moreover, even if environmental cleanups are permitted to proceed, maintaining the recommended “social distancing” in site investigation or remediation activities presents a challenge. Further challenges to ongoing site investigations and cleanups may also arise due to workforce absenteeism due to illness or caring for an ill family member.
EPA has not yet released guidance on the impact to agency operations due to COVID-19. Moreover, each site is differently situated, so there may be no one-size-fits-all solution. Parties currently remediating sites pursuant to settlements with EPA should carefully scrutinize their respective agreements and orders, including the force majeure clauses, to determine whether current circumstances may constitute such an event, and how and when to notify the agency. Most such provisions require notification within days, or even hours, of the discovery of the force majeure event, prompting yet more uncertainty as to whether there has been a trigger based on the novel pandemic response gripping the nation.
For example, EPA’s Model Consent Decree Language and Model Administrative Consent Order Language both define force majeure events as any event arising from “causes beyond the control” of respondents that “delays or prevents the performance of any obligation” under the order despite respondents’ “best efforts to fulfill the obligation.”
Each ongoing cleanup faces unique challenges depending on locality and nature of the cleanup. Responsible parties should consider outreach to EPA requesting the following actions:
- Recognize the rapidly changing circumstances at the local, state, and federal level caused by COVID-19
- Temporarily suspend notice deadlines for force majeure events caused by the COVID-19 crisis, as well as waive penalties for failure to timely notice or meet a deadline where the implications of COVID-19 have made it impracticable or impossible
- Work with responsible parties on an individualized basis to determine whether ongoing work can continue and the extent to which deadlines should be extended, and follow a dispute process in the event of disagreement
- Acknowledge that there may not be a one-size-fits-all approach for sites that are at different stages of remedial progress and subject to varying state restrictions
Until state and federal environmental authorities take affirmative action, responsible parties should consider proactive outreach to their EPA and state agency contacts for their specific cleanup sites for further guidance in this unprecedented situation, and stay tuned for further announcements on the status of environmental cleanups in the midst of the COVID-19 pandemic.
Copyright 2020. Morgan, Lewis & Bockius LLP. All Rights Reserved.
This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.
About the Authors
John McGahren is the Princeton litigation practice leader and deputy chair of the firm’s global environmental practice. John counsels clients on litigation, enforcement, and transactional matters. He prosecutes and defends citizen suits, Superfund and RCRA disputes, Clean Water and Air Act litigation, state law actions, and natural resource damage claims.
Stephanie R. Feingold represents clients in litigation and dispute resolution and provides environmental and regulatory counseling. Her work spans investigations, cost recovery and contribution actions, and enforcement actions brought by and against environmental agencies and government authorities, as well as private party actions.
Ariel Kapoano represents clients in complex environmental, toxic tort, contract, and consumer fraud litigation matters. She has experience in all aspects of litigation including factual investigation, discovery management, motions practice, and trial.
Jenna C. Ferraro is a part of the firm’s litigation team, which counsels clients and provides legal services in a wide range of areas, including general civil and commercial litigation, environmental law and toxic torts. Jenna’s experience includes many aspects of litigation, including discovery matters and motion practice.