The course ahead

Automobile emissions and industrial smokestacks have dominated the attention of government agencies, courts, the media and the general public. As the new millennium begins, however, the new technological era is spawning more than a new economy. Internet, e-commerce and broadband

issues may be generally free of refuse, but work environments associated with them are drawing attention to indoor air quality (IAQ) issues.

For pure shock value, the cover story of the June 5, 2000, issue of Business Week asked: "Is Your Office Killing You?" The July 12, 2000, issue of the Journal of the American Medical Association discussed indoor exposure to lead from the burning of candles with lead containing wicks. In Texas, IAQ issues involving molds in residences and schools received extensive media coverage by national television news programs.

IAQ regulatory limitations

Unlike other environmental quality issues, indoor air pollution has not been addressed by any comprehensive statutory and regulatory scheme. On the federal level, IAQ is governed by a variety of statutory and regulatory programs administered by several regulatory programs which, in turn, are administered by several federal agencies. Overall, at least 20 federal agencies have some involvement with IAQ issues. The U.S. Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) are lead agencies tracking these issues. They are joined by the National Institute for Occupational Safety and Health (NIOSH), Department of Energy (DOE) and the Consumer Product Safety Commission to comprise the Interagency Committee on Indoor Air Quality (ICIAQ).

The legislative landscape is filled with statutes affecting indoor air quality - the Toxic Substances Control Act, The Federal Insecticide, Fungicide and Rodenticide Act, even the Safe Drinking Water Act. As might be expected, the most well developed regulations dealing with IAQ are OSHA work-place standards, which apply directly to industrial settings (see reference). In 1994, OSHA proposed extensive rules dealing with workplace exposure in non-industrial settings (see 59 Fed. Reg. 15968, April 5, 1994); however, these regulations have not yet been adopted.

Turning to IAQ litigation

Because of the spotty regulatory coverage of IAQ, common law remedies involving litigation may be the more likely venue for addressing these issues in the near future. Classes of parties who have asserted common law causes of action include building owners and occupants, manufacturers, contractors and subcontractors, insurers and design professionals. Typically, the plaintiffs in IAQ cases are individuals, but commercial tenants and building owners have also filed legal actions, if their employees or occupants have raised IAQ concerns. They argue for liability in their claims based on negligence, strict liability, breach of express or implied warranties, fraud or misrepresentation, and premise's liability.

Because of the spotty regulatory coverage of IAQ, common law remedies involving litigation may be the more likely venue for addressing these issues in the near future.

Perhaps the two most important litigation issues in almost all IAQ cases are the presentation of expert witnesses and statute of limitations concerns. Concerning experts, the admission of expert testimony first espoused in Daubert v. Merrell Dow Pharmaceutical Inc., 509 U.S. 579 (1993), is likely to be critical, especially in IAQ litigation involving personal injury. In Daubert, the U.S. Supreme Court addressed the admissibility of scientific evidence and held that trial judges should only admit scientific evidence that is both reliable and relevant. Since the 'gatekeeping' function described in Daubert was extended to all experts in Kumho Tire Co. v. Carmichael, 526 U.S. 137

(1999), it is probable that expert qualification issues will arise in any IAQ litigation; especially with regard to causation theories, expert testimony may be contentious.

Concerning statute of limitations questions, the most contentious issue will likely be a determination of when the plaintiff knew, or exercising due diligence, should have known, of his or her injury. Interestingly, Section 309 of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), (commonly known as Superfund) 42 U.S.C. 9658, provides for a federal discovery rule that may be applicable in cases of IAQ claims, to the extent that the injuries are alleged to be "caused or contributed to by exposure to any hazardous substances or pollutant or contaminant released into the environment from a facility." The definitions of the applicable terms are broad enough to encompass a variety of IAQ claims.

If they do, then CERCLA provides that the limitations period does not commence until "the plaintiff knew (or reasonably should have known) that the personal injury or property damage . . . were caused, or contributed to, by the hazardous substance or pollutant or contaminant concerned." This provision could potentially toll a statute of limitations - that is, show facts that remove the statute of limitation's bar to filing a lawsuit - longer than applicable state standards, since it appears to require knowledge that a particular substance caused the injury, rather than knowledge of the injury without necessarily identifying the substance, as is the rule in many states.

While common law claims should occupy the preeminent position for IAQ issues for the immediate future, a comprehensive federal statutory scheme may be developed. In addition to closely monitoring the emerging case law concerning IAQ that promises to make an appearance in 2001, activities of the EPA, OSHA and other federal agencies should be monitored to identify any attempt to develop a comprehensive regulatory scheme for indoor air quality.

EPA's focus on NSR and PSD compliance

EPA, meanwhile, has published its enforcement priorities for fiscal year 2002-03 (65 Fed. Reg. 58273). Some of the current EPA enforcement priorities may continue to be priorities in fiscal year 2002-03. One such enforcement priority is compliance with federal non-attainment new source review (NSR) and prevention of significant deterioration (PSD) requirements. Petroleum refineries and electric utility power plants have been the targeted industries in these enforcement actions. Based on the information requested in EPA letters and in compliance orders, the focus of the EPA's efforts appears to be whether all required pre-construction NSR and PSD permits are obtained for past facility construction and modification activities.

Under the Clean Air Act (CAA), two EPA programs require pre-construction permitting. To achieve attainment and maintenance of the National Ambient Air Quality Standards (NAAQS), pre-construction permits are required for new major emission sources and major modifications of existing major emission sources. Pre-construction permits are required under both the PSD program for NAAQS attainment areas, and the NSR program for NAAQS non-attainment areas.

In implementing the NSR/PSD pre construction permit requirements, the EPA has exempted certain activities from being considered physical or operational changes. One such exemption is for "routine maintenance, repair and replacement . . ." Whether physical changes at targeted industrial sector facilities required pre-construction permits, or were routine maintenance, repair and replacement, has been at issue in much of EPA's recent NSR/PSD enforcement activities.

Based on a recent EPA NSR/PSD applicability determination and EPA arguments in a recent Environmental Appeals Board (EAB) compliance order reconsideration, EPA appears to be using a "four factors test" to determine whether an activity is routine maintenance, repair or replacement that is exempt from pre-construction permitting requirements. EPA has stated that it will make a case-by-case determination of whether an activity at a facility is an exempted routine maintenance, repair or replacement by considering four factors regarding the activity (see Figure 1).

Figure 1
Four factors test

    * Its nature and extent: "Nature and extent" issues generally address modification or replacement of a facility's major components, and how, when and to what extent those changes will be made,

    * Its purpose: "Purpose" addresses why modifications or replacements are taking place,

    * Its frequency: "Frequency" focuses on how often the changes need to be made, and

    * Its cost: "Cost" determines how costly changes will be relative to the unit's replacement cost and whether the cost is included in the facility's capital budget, or will be borne by the facility's operating budget.

Many in the regulated community have argued that the use of this "four factors" test is a departure from previous EPA positions on the scope of the routine maintenance, repair and replacement exemption, and that industry has not been given adequate notice of EPA's intent to apply this test. Regardless, the EAB recently upheld EPA's use of this "four factors" test, and it appears likely that EPA will continue to apply this test to facilities belonging to industry sectors that EPA has targeted for future enforcement activities. Targeted or not, facility owners and operators would be advised to apply the "four factors" test to determine if proposed equipment or facility modifications are subject to CAA NSR/PSD pre-construction permitting requirements.

Impact of Supreme Court's ruling on NAAQs

On a related front, a very significant case relating to EPA's adoption of revised NAAQS for ozone and particulate matter has been accepted by the U.S. Supreme Court for review. This is the case of the American Trucking Association v. EPA, 175 F3d 1027 (D.C. 1999), pet. granted 120 S. Ct. 203 (2000), where the U. S. Court of Appeals for the D.C. Circuit upheld many of the claims leveled against EPA relating to its adoption of the revised NAAQS. The Supreme Court will decide whether EPA should consider costs in setting the health-based in setting ambient air quality standards.

Perhaps the two most important litigation issues in almost all IAQ quality cases are the presentation of expert witnesses and statute of limitations concerns.

Under current interpretations of the law, which the Supreme Court has upheld for 20 years, setting national ambient standards involves two essential steps. First, EPA examines epidemiological and other data without regard to costs in determining the point at which air polution adversely affects public health and the environment. Second, EPA does consider the costs of a proposed policy compared to its benefits in developing clean air policy to attain these standards.

In addition to the briefs filed with the Supreme Court by the parties to the suit, many briefs have been filed by private parties or friends of the court (known as amici). In an unprecedented move, the challenges and amici include the states of Ohio, Michigan, West Virginia, California and North Carolinia, to name a few. Other respondents and amici represent a variety of industries, including the National Mining Association, General Electric Company, the Small Business Survival Association, the American Forest & Paper Association, and several congressmen.

The most well developed regulations dealing with IAQ are OSHA workplace standards, which apply directly to industrial settings.

The importance of this decision to affected industries nationwide cannot be overstated. A decision in EPA's favor will affect the very existence of certain regulated businesses that cannot afford the cost of compliance, and will severely affect even those choosing to comply. A decision against EPA could negate the long-suffering and finally adopted "eight hour" ozone NAAQS, as well as the revised NAAQS for particulate matter. But even beyond these obvious possibilities, a broad ruling by the Supreme Court could affect how EPA adopts future rules that further apply to the Clean Air Act.

An extensive analysis of federal statutes dealing with indoor air quality is contained in Arnold W. Reitze and Sheryl Lynn Carof, The Legal Control of Indoor Air Pollution, 25 B.C. Envtl. Aff. L. Rev. 247 (1998).

William J. Moltz, JD, is an environmental attorney in the Austin, Texas office of Jenkens & Gilchrist, P.C. Jenkens & Gilchrist. To contact Mr. Moltz, call (512) 499-3800 or email

This article originally appeared in the 01/01/2001 issue of Environmental Protection.

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