Industrials Regulatory News and Trends - September 8, 2023

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal and regulatory landscape.

EPA issues new WOTUS rule in response to Supreme Court ruling. The Environmental Protection Agency and the US Department of the Army have issued a final rule to amend the legal definition of “Waters of the United States” to conform it with the US Supreme Court’s May 25 ruling in Sackett v. EPA. That decision significantly limited the scope of the Waters of the United States or WOTUS. Parts of the EPA’s existing rule on WOTUS, issued on January 18, are invalid under the decision. The definition of Waters of the United States determines which wetlands are protected under the Clean Water Act. In response to the EPA’s August 29 action, opponents of federal jurisdiction continue to assert that even as amended, the WOTUS rule is overly broad, unduly burdensome, and insufficiently certain.

Biden Administration will offer $12 billion to foster manufacture of electric vehicles. On August 31, the US Department of Energy announced it will offer up to $12 billion to automakers for the purpose of converting auto manufacturing facilities into plants for electric, plug-in hybrid, or fuel cell vehicles. Automakers will be eligible for loans or grants to retrofit and repurpose existing factories, to make plug-in electric, hybrid, or hydrogen fuel cell vehicles, Energy Secretary Jennifer Granholm said. A total of $10 billion will come from the Energy Department’s Loan Program Office and an additional $2 billion from Inflation Reduction Act grants. The new program aims to refurbish factories in communities with existing auto manufacturing facilities and to bolster the domestic EV manufacturing capability.

NHTSA says automakers may comply with state “right-to-repair” law. On August 22, the National Highway Traffic Safety Administration said that automakers may comply with a Massachusetts “right-to-repair” law requiring them to share vehicle data with vehicle owners and independent repair shops. The agency reversed course after previously objecting that compliance with the law could make vehicles vulnerable to hacking and create vehicle safety risks. The agency subsequently determined that automakers can safely share diagnostic data with independent repair shops using short-range wireless technology such as Bluetooth – but warned that using long-range wireless signals could potentially let hackers send dangerous commands to moving vehicles. The Massachusetts law, approved a ballot initiative in 2020, gives independent repair shops access to diagnostic and repair data and information that newer cars can provide directly to authorized dealers and manufacturers. The idea behind the law is to allow vehicle owners access to their vehicle data, to allow consumers to seek repairs from independent repair shops, and to allow independent repair shops to compete for repair business. Right to repair laws and regulations have extended beyond motor vehicles to many other products, as discussed in our recent report, The right to repair – what’s at stake, and what’s happening.

Public water systems report on PFAS sampling. On August 17, the Environmental Protection Agency issued a data set indicating the presence of PFAS in scores of water systems in the nation. This is the first of multiple data sets the EPA plans to collect through 2025, under a rule that requires public water systems to test for 29 different PFAS substances in drinking water. The initial data set released includes over 2,000 water systems from across the US that tested for 29 PFAS. Of this initial set of water systems, roughly 20 percent detected one or more of the 29 PFAS. Environmental groups say the information in this data set underestimates the true scope of PFAS contamination because water systems are required to monitor only 29 of the thousands of PFAS substances in the marketplace, and they do not need to report PFAS detected below the EPA’s reporting limits (which are as low as 4 ppt for some PFAS).

Court holds that EPA violated Endangered Species Act. On August 18, the US District Court for the District of Arizona ruled that the EPA violated the Endangered Species Act in 2016 when it failed to assess harms to endangered species before increasing the levels of the heavy metal cadmium allowed in US waters. The ruling came in a 2022 lawsuit filed by the Center for Biological Diversity. “This groundbreaking decision will protect Atlantic sturgeon, sea turtles and other aquatic wildlife from cadmium pollution and make our waters safer for people across the country,” said Hannah Connor, a senior attorney at the center. “This ruling also means the EPA can no longer ignore the freshwater extinction crisis when it sets criteria for other dangerous pollutants like the forever chemical PFAS.” The court wrote, “EPA does not have discretion to avoid its obligations under the ESA because EPA thinks they are inconvenient.”

FAA says it is considering regulation of charter flights. The Federal Aviation Administration announced on August 24 that it is considering subjecting high-volume charter flight operators to the same strict safety regulations that are imposed on passenger airlines. The number of charter flights has grown dramatically in recent years, and charter flights are not subject to the same training for first officers, mandatory retirement of pilots at age 65, or minimum rest periods for airline pilots that apply to passenger airlines. Charter flights can carry up to 30 people, and those passengers need not be screened by the Transportation Security Administration. The FAA said the rapid growth of charter flights “poses an increased risk to safety if left unchecked” and that it will begin a rulemaking to address this safety risk.