Louisiana has been at the center of the Biden Administration’s prioritization of environmental justice (EJ) issues.

In United States v. Denka Performance Elastomer, the Eastern District of Louisiana granted a motion by the federal government to dismiss various arguments offered by Denka to shut down federal arguments that chloroprene emissions from a Denka facility posed an “imminent danger” to public health in nearby communities.

The decision, that we break down in detail below, highlights three issues of importance to the regulated community:

• First, regulatory challenges are often barred by statutes of limitations. Here, a court rejected various arguments as to why a 2010 decision should be “reopened.” Regulated entities should keep an eye out for rulemakings and other regulatory actions which could affect their business and timely engage to mitigate potential business impacts.
• Second, federal use of environmental laws to address EJ concerns can be controversial (see here), available non-EJ resources (e,g., these) can be used in ways that materially impact business operations.
• Third, there’s not always a simple path to attack perceived regulatory “overreach.” Here, a regulated entity sought to use a motion to dismiss to challenge an agency’s somewhat novel enforcement suit against it, which required the entity to convince a court that an agency used flawed science to set a risk-based exposure limit more than 10 years before. Unsurprisingly, the court rejected this approach. The entity was left to challenge the science in the context of a high-stakes hearing where a potential outcome could be a court-ordered closure of the involved facility. 

Background

We have featured Louisiana-focused EJ issues repeatedly in the past year, most recently here. We first discussed the Denka facility in the context of a US Environmental Protection Agency (EPA) civil rights investigation, under which it was the subject of an EPA complaint under Section 303 of the Clean Air Act (CAA). The complaint sought to compel Denka to significantly reduce chloroprene emissions from its neoprene manufacturing facility. EPA’s complaint asserts that the facility’s chloroprene emission causes an imminent and substantial endangerment to public health. More specifically, EPA alleges that children are particularly vulnerable to chloroprene and that “Denka’s chloroprene’s emissions reach more than 300 young children who attend the 5th Ward Elementary School, located within approximately 450 feet of Denka’s facility.”

Importantly for this discussion, EPA’s claims are not typical CAA claims for violations of CAA’s National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations, 40 CFR Parts 61 and 63. Instead, EPA is pursuing more stringent remedies by relying in part on “fenceline data” and the proximity of a school to an industrial facility.

Federal regulators last reviewed chloroprene in 2010 when regulators set a 0.2 μg/m3 1-in-10,000 risk-based value for chloroprene. Here, Denka’s attempts to challenge this review directly were barred by relevant statutes of limitations. Additionally, the court found that EPA generally had significant discretion relevant to when and how it would use information to review standards which had existed too long to be challenged directly because neither the federal Administrative Procedure Act (APA) or statutes like the Information Quality Act (IQA), directed to the federal Office of Management and Budget (OMB), had standards courts could use to meaningfully evaluate a challenge like Denka’s.  

In the court’s view, Denka’s available means to challenge the risk-based value was to mount a “challenge the science behind the . . . Section 303 action” in response to the United States’ request for a preliminary injunction. While the regulated entity can use expert testimony to challenge the risk-based standard as part of an injunctive proceeding, proceedings like this are risky and most businesses would prefer off-ramps that eliminate the potential that a government injunction could shut-down facility operations.