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2 March 20236 minute read

Industrials Regulatory News and Trends - March 2, 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.

In the wake of train derailment, trade publication responds to criticism of plastics. In a February 25 editorial, Plastics Today magazine lamented the idea that environmental groups have seized upon the train derailment in East Palestine, Ohio, to criticize the manufacture and use of plastics. A controlled burn of materials used in the manufacture of plastics and spilled from the train sent up a “chemical plume,” and a group called Toxic-Free Future said that “sadly, this is yet another painful reminder of the dangers of making, transporting, using, and disposing of chemicals in plastics, especially polyvinyl chloride (PVC) plastic.” The editorial replied that rather than phase out PVC and similar plastics, the nation would do well to address train safety, including antiquated braking systems. “Maybe start there before leapfrogging into an anti-plastics screed?” the article concluded.

Raytheon says the way is clear for more deliveries of F-35 fighter jets. Raytheon Technologies Corp., a major defense manufacturer, announced February 24 that the US government has cleared its Pratt & Whitney unit to resume deliveries of its F-135 engine for the F-35 fighter jet, after a halt took place in December following the discovery of a safety concern. The F-35 Joint Program Office said in a statement that its engineers worked alongside Pratt & Whitney and Lockheed Martin to develop “mitigations for a rare system phenomenon involving harmonic resonance to develop a path forward for safe operation of the F-135 in flight.” The F-35 fighter jet is considered a fifth-generation strike aircraft weapon system for the US Air Force, US Navy, US Marine Corps, seven cooperative international partners, and seven current foreign military sales customers.

Lockheed Martin is awarded contract to develop hypersonic weapon systems for the US Navy. On February 17, Lockheed Martin announced that the US Navy has awarded it a major defense contract worth up to $2 billion related to hypersonic weapon systems. Under the contract, Lockheed will integrate the Conventional Prompt Strike (CPS) weapon system on to the Navy's ZUMWALT-class destroyer stealth ships. The defense contractor will also provide launcher systems, weapon control, integrated missile components, and platform integration support for the naval platform. The contract was awarded at a time when the US and its global rivals have been developing many varieties of hypersonic weapons. Hypersonic weapons fly at speeds of at least Mach 5 and, unlike ballistic missiles, are highly maneuverable and can change course during flight.

Ukraine requests the addition of Lockheed Martin’s F-16 to its fighting armory. On February 19, Reuters reported that Ukrainian officials have urged members of the US Congress to press the Biden Administration to send F-16 jet fighters, made by Lockheed Martin, to Ukraine. They said the aircraft would boost Ukraine's ability to hit Russian missile units with US-made rockets. “They told us that they want [F-16s] to suppress enemy air defenses so they could get their drones” beyond Russian front lines, Senator Mark Kelly, a former astronaut who flew US Navy fighters in combat, said. Last month, President Joe Biden said he would not approve Ukraine’s request for the jet fighters. Biden Administration officials said the United States should focus on providing weapons that can be used immediately on the battlefield, rather than fighter jets that require extensive training.

Republican state AGs file lawsuit over EPA definition of protected waters. On February 15, two dozen Republican state attorneys general filed a lawsuit against the Environmental Protection Agency seeking to quash an EPA rule that governs which waters are entitled to federal environmental protections. Late last year, the Biden Administration issued a new rule concerning how the US government determines which types of wetlands and streams should receive federal protection from pollution. Announcing the lawsuit, the attorneys general argued that the rule issues environmental protections too liberally and that it could end up harming ranchers, farmers, miners, homebuilders, and other landowners. “You cannot regulate a puddle as you do a river and doing so will never give us cleaner water,” West Virginia Attorney General Patrick Morrisey said in a statement. The US Supreme Court is about to issue an opinion on another case that involves classification of wetlands.

NAM’s leader pushes hard for permitting reform. Meeting with congressional leaders in Washington, DC, on February 23, Jay Timmons, the president and CEO of the National Association of Manufacturers, emphasized the urgent need for permitting reform to help American manufacturers compete. “Some of the biggest obstacles preventing manufacturers -- and therefore the entire American economy -- from reaching our full potential are the permitting delays, red tape and complicated bureaucracy that have plagued us for decades,” Timmons told the leaders of several House committees. He said that the difficulty of obtaining permits from the government is a pervasive problem in industries such as oil and gas, nuclear energy, transportation, mining, and many others. “Permitting affects every aspect of our lives – from our economic security to our national security,” said Timmons. “If we seize this opportunity to lead, there is no limit to what manufacturers in the United States can accomplish – for the good of our people and for the good of the world.”

Semiconductor industry seeks exemption from key environmental law. On February 27, Politico magazine reported that the semiconductor industry is quietly lobbying the Biden Administration to relax environmental review requirements or risk ceding preeminence in semiconductors to China. The Semiconductor Industry Association, the chip industry’s main voice in Washington, is pressing the Commerce Department to grant new manufacturing projects a “categorical exclusion” from a key environmental law. With billions now ready to be spent under the CHIPS and Science Act, industry lobbyists worry that the law’s review requirements could delay domestic chip production for years. The law in question is the National Environmental Policy Act, a decades-old law that puts extra environmental review requirements on construction projects in which the federal government plays a major role. This is something with which the semiconductor industry has little or no experience, and it is concerned that compliance will lead to lengthy delays.

NAM objects to proposed rule on climate disclosures by federal contractors. On February 15, the National Association of Manufacturers wrote a formal letter to the Federal Acquisition Regulatory Council, expressing opposition to a draft rule put forth by the council that is intended to force federal contractors to make specific, detailed disclosures of their contract activity’s impact on the climate. The NAM said that the proposed rule is burdensome and unrealistic and that it will impose costs on manufacturers. It took the position that the rule should be rescinded completely. Under the proposed rule, the group said, manufacturers providing critical goods and services to the federal government, as well as the businesses located at all points in their supply chains, would be directly and adversely impacted and that the national security of the United States could be harmed because critical contractors could be disqualified from serving the US military.


Gwen Keyes Fleming

George Gigounas

Scott R. Wilson