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emissions

What Environmental Legal Challenges Can Businesses Expect from Activists During Trump’s Administration?

emissionsEnvironmental groups have for years pursued a variety of legal approaches against businesses in attempts to force federal regulations related to climate change.

Under a Trump administration, their strategies may be changing again. In fact, a rollback in environmental regulations or enforcement may mean an increase in citizen lawsuits and private litigation.

This, according to Litigation Forecast 2017: What Corporate Counsel Need to Know for the Coming Year, published by law firm Crowell & Moring. The annual forecast analyzes issues, trends, and likely litigation challenges that businesses may face in 2017 on developments affecting a wide range of companies in nine areas of law including environmental law.

As Thomas A. Lorenzen, a partner in the firm’s Environment & Natural Resources and Government Affairs groups says, environmental groups’ next area of focus will likely be corporate disclosures and climate risk.

“The New York attorney general’s office has announced actions against several companies alleging that they knew climate change was a problem but failed to disclose it as required by the securities laws,” he says in the forecast. “I think plaintiffs will be taking a very hard look at what the various state attorneys general and the SEC are doing in this area over the next few years to determine whether they can bring claims out of it.”

The litigation forecast comes as manufacturers are calling on President Donald Trump to rollback federal regulations — including emissions rules — that they say are killing American manufacturing. If the cost of those rules were cut, then they could allocate capital to everything from research to modern technologies to jobs, according to the National Association of Manufacturers.

A new NAM study, called Holding US Back: Regulation of the U.S. Manufacturing Sector, says that overwhelming majority of its members say that the regulatory system has gotten worse over the last five years.

But while a Trump EPA will likely mean less environmental regulation for businesses, Lorenzen says regulatory change may increase activists’ lawsuits brought against companies. “Environmental groups may well choose to bring cases that the EPA would not ordinarily have brought. There are situations where the EPA would probably give a company that’s producing emissions the benefit of the doubt under the previous regulations. [Under the new administration] environmental groups are going to be looking at those sources with a magnifying glass.”

He points to the Clean Power Plan, which requires the power sector to reduce their CO2 emissions by 32 percent by 2030, compared to 2005 levels, as an example. Trump’s election — and legal challenges involving some 150 plaintiffs — make it likely that the Clean Power Plan will either be drastically scaled back or eliminated entirely. But this doesn’t mean the Clean Power Plan will disappear from the courts, Lorenzen says.

Another example is the EPA’s Next Generation Compliance initiative, which requires regulated companies to use advanced pollution detection technologies and electronic reporting, which makes environmental reporting more transparent and accessible to the public, the agency says.

“It also puts powerful monitoring tools that weren’t previously available into the hands of the citizenry” such as small infrared cameras attached to smart phones that can capture emission images, Lorenzen says. “Those kinds of things can be used to support citizen suits.”

The bottom line for companies: expect more lawsuits from environmental groups.

“They will probably keep pursuing all the avenues they can and looking for new legal theories to bring the issue to court,” he says. “They are taking an all-in approach to this, pursuing both regulators and companies that are emitting greenhouse gases. That means that lots of companies can expect this to be a growing part of their litigation docket.”

 

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