Articles, Alerts & Perspectives

Supreme Court Significantly Scales Back Scope of NEPA Review for Infrastructure Projects

Environmental Alert

(by Robert Stonestreet)

Through a unanimous 8-0 decision, the Supreme Court of the United States addressed what it described as “continuing confusion and disagreement in the Courts of Appeals” over the scope of judicial review for claims asserting violations of the National Environmental Policy Act (NEPA). Seven County Infrastructure Coalition v. Eagle County, No. 23-975 (May 29, 2025). In doing so, the Supreme Court clarified that decisions by federal agencies under NEPA are entitled to substantial deference, and courts should not be in the business of second-guessing how agencies weigh competing considerations under NEPA. “The bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.” Additionally, the Supreme Court ruled that NEPA does not compel federal agencies to address the environmental effects of projects separate in time or place from the construction and operation of the proposed project at issue.

Justice Kavanaugh authored the main opinion joined by Justices Alito, Thomas, and Barrett along with Chief Justice Roberts. Justice Sotomayor penned a separate concurring opinion joined by Justices Kagan and Jackson. Justice Gorsuch did not participate in the case.

Rail Project at Issue

In December 2021, the federal Surface Transportation Board approved an application to construct an 88-mile rail line in Utah’s Uinta Basin that would primarily transport crude oil to interstate rail lines and ultimately to refineries along the Gulf Coast.

NEPA required the Board to evaluate environmental impacts of the proposed project and consider potential alternatives to the project that would avoid or minimize those impacts. The Board’s NEPA evaluation was reflected in an Environmental Impact Statement (EIS) spanning more than 3,600 pages. Several non-governmental organizations and a local county filed a legal challenge under NEPA in the District of Columbia Circuit Court of Appeals, alleging that the Board failed to adequately consider the impacts of certain “upstream and downstream” activities that are separate from the proposed rail line. Specifically, the Board did not perform a detailed analysis of (1) increased crude oil development that may occur in the Uinta Basin once the rail line goes into service; or (2) air emissions at refineries along the Gulf Coast associated with processing crude oil extracted from the Uinta Basin.

Court of Appeals Decision

Finding in favor of the challengers, the D.C. Circuit agreed that future crude oil development and refining were “reasonably foreseeable impacts” that the Board should have evaluated. The D.C. Circuit rejected the Board’s position that those effects arose from other projects that were separate in time and space from the rail line and were also beyond the jurisdiction of the Board, which does not regulate crude oil extraction or refining.

Kavanaugh Opinion

The main court opinion makes clear that judicial review under NEPA involves affording substantial deference to the decisions by the federal agencies involved. That is because assessment of environmental effects and feasible alternatives involves “a series of fact-dependent, context-specific, and policy-laden choices.” Thus, courts “should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness.” Nevertheless, Justice Kavanaugh observed that “[s]ome courts have strayed and not applied NEPA with the level of deference demanded by the statutory text and this Court’s cases.” In doing so, “NEPA has transformed from a modest procedural requirement into a blunt and haphazard tool employed by project opponents (who may not always be entirely motivated by concern for the environment) to try to stop or at least slow down new infrastructure and construction projects.”

Kavanaugh’s opinion wholly rejects the notion that NEPA requires federal agencies to consider other existing or potential future projects that are separate in space and time from the proposed project under consideration. The opinion observes that NEPA’s focus is the “project at hand – not other future or geographically separate projects that may be built (or expanded) as a result of or in the wake of the immediate project under consideration.” Consequently, “NEPA does not require the agency to evaluate the effects of that separate project.” The Board was therefore “[a]bsolutely correct” in concluding that it need not perform a detailed analysis of the potential for future crude oil development in the Uinta Basin and refining activities along the Gulf Coast.

Lastly, Kavanaugh observed that NEPA litigation should not be a forum for project opponents “to air their policy objections to proposed federal actions.” “Citizens may not enlist the federal courts, ‘under the guise of judicial review’ of agency compliance with NEPA to delay or block agency projects based on the environmental effects of other projects separate from the project at hand.”

Concurring Opinion

The concurring opinion authored by Justice Sotomayor and joined by Justices Jackson and Kagan observes that the Board lacked jurisdiction over potential future crude oil development and refinery activities, and lacked authority to restrict transportation of crude oil on the proposed rail line. Therefore, there was no need for the Board to consider impacts of those activities.

What’s Next?

NEPA has been called one of the most litigated environmental statutes in the United States. This decision should set a higher bar for project opponents to succeed on NEPA claims. The Court made clear that the judiciary should afford substantial deference to how federal agencies weigh the respective impacts and benefits of a proposed project. Whether this pronouncement will prompt developers to move forward with additional projects, and how much deference will actually be afforded by the lower courts, remains to be seen. This decision does not directly affect the legal landscape for challenges brought under substantive environmental statutes like the Clean Water Act, Clean Air Act, or Endangered Species Act, although actions challenging major projects that allege violations of these statutes are often paired with a NEPA claim.

If you would like to discuss this decision or NEPA in general, please contact Robert M. Stonestreet at rstonestreet@babstcalland.com or 681.265.1364.

EPA Announces Plan to Scale Back and Extend Compliance Deadlines for Federal Drinking Water Regulations on PFAS

Environmental Alert

(Sloane Wildman and Jessica Deyoe)

On May 14, 2025, less than three weeks after the U.S. Environmental Protection Agency (EPA) released its strategy to address per and polyfluoroalkyl substances (PFAS), the EPA announced its intent to retain the existing drinking water standards for the two most common PFAS (perfluorooctanoic acid (PFOA) and perfluorooctane (PFOS)). At the same time, EPA stated it would rescind and “reconsider” the regulation of the four other PFAS compounds included in the previous rule (perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), perfluorohexane sulfonic acid (PFHxS) and perfluorobutane sulfonic acid (PFBS)). For more information on the prior rule, see our April 2024 Alert, available here and for more information on EPA’s strategy to address PFAS, see our April 2025 Alert, available here.

In addition to limiting the number of PFAS compounds subject to regulation under the Safe Drinking Water Act, EPA stated it would extend compliance deadlines for PFOA and PFOS from 2029 to 2031, create a framework for federal exemptions for passive receivers of PFAS (consistent with its goal to “hold polluters accountable”), and establish a new “PFAS OUTreach Initiative” (PFAS OUT). According to EPA Administrator Lee Zeldin, with its particular emphasis on water systems in rural and small communities, PFAS OUT will “connect with every public water utility known to need capital improvements to address PFAS in their systems” by sharing resources, tools, funding, and technical assistance to help utilities meet the federal drinking water standards.

Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, or your Babst Calland relationship attorney.

EPA’s PFAS Strategy Signals New Approach

Environmental Alert

(by Sloane Wildman, Jessica Deyoe and Ethan Johnson)

On April 28, 2025, U.S. Environmental Protection Agency Administrator Lee Zeldin announced “major EPA actions to combat PFAS contamination.” Few details have been provided yet, but in emphasizing EPA’s goals in “strengthening the science,” “fulfilling statutory obligations and improving communication,” and “building partnerships” with states and Tribes, EPA signals that it may take a different regulatory approach to PFAS (per- and polyfluoroalkyl substances) than the prior administration.

The announcement does not expressly discuss the two major PFAS regulatory actions from the Biden administration – the designation of two PFAS compounds as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the promulgation of enforceable Maximum Contaminant Levels (MCLs) and non-enforceable health-based Maximum Contaminant Level Goals (MCLGs) for six PFAS compounds under the Safe Drinking Water Act (SDWA). Both rules are currently subject to judicial challenges (CERCLA challenge opening brief here; SDWA challenge opening brief here). However, in an implicit acknowledgment of concerns regarding the CERCLA rule raised by “passive receivers” of PFAS, including water utilities, EPA states that it will work with Congress and industry to establish a liability framework that operates on a “polluter pays” principle, to provide “certainty” to these passive receivers.  This will require Congressional action, as only Congress, and not EPA, has the authority to shield passive receivers such as local water utilities from CERCLA liability.

The announcement further suggests EPA may take a more industry-friendly approach with respect to some of the proposed PFAS actions that were initiated during the Biden administration. For example, while it does not expressly reference regulations proposed under the Resource Conservation and Recovery Act (RCRA) to add 9 PFAS (including their salts and structural isomers) to the list of “hazardous constituents” in Appendix VIII of 40 C.F.R. Part 261 and to clarify that emerging contaminants – including PFAS – can be addressed under RCRA’s Corrective Action Program, EPA states that it will determine how to “better use RCRA” to address releases. EPA’s announcement also references the development of Effluent Limitations Guidelines (ELGs) under the Clean Water Act for PFAS manufacturers and metal finishers, and the evaluation of whether ELGs are necessary for other industries but does not provide concrete plans for such regulatory developments.

EPA’s announcement does not provide a timeline for any of its intended PFAS actions, and it is unclear how quickly EPA expects to implement them.

The full list of PFAS actions included in EPA’s announcement is below. EPA also stated that this list “is the first, not the last, of all decisions and actions EPA will be taking to address PFAS over the course of the Trump administration.”

Strengthening the Science

• Designate an agency lead for PFAS to better align and manage PFAS efforts across agency programs
• Implement a PFAS testing strategy under Toxic Substances Control Act (TSCA) Section 4 to seek scientific information informed by hazard characteristics and exposure pathways
• Launch additional efforts on air related PFAS information collection and measurement techniques related to air emissions
• Identify and address available information gaps where not all PFAS can be measured and controlled
• Provide more frequent updates to the PFAS Destruction and Disposal Guidance—changing from every three years to annually—as EPA continues to assess the effectiveness of available treatment technologies
• Ramp up the development of testing methods to improve detection and strategies to address PFAS

Fulfilling Statutory Obligations and Enhancing Communication

• Develop effluent limitations guidelines (ELGs) for PFAS manufacturers and metal finishers and evaluate other ELGs necessary for reduction of PFAS discharges
• Address the most significant compliance challenges and requests from Congress and drinking water systems related to national primary drinking water regulations for certain PFAS
• Determine how to better use RCRA authorities to address releases from manufacturing operations of both producers and users of PFAS
• Add PFAS to the Toxic Release Inventory (TRI) in line with Congressional direction from the 2020 National Defense Authorization Act
• Enforce Clean Water Act and TSCA limitations on PFAS use and release to prevent further contamination
• Use Safe Drinking Water Act authority to investigate and address immediate endangerment
• Achieve more effective outcomes by prioritizing risk-based review of new and existing PFAS chemicals
• Implement section 8(a)7 to smartly collect necessary information, as Congress envisioned and consistent with TSCA, without overburdening small businesses and article importers
• Work with Congress and industry to establish a clear liability framework that operates on polluter pays and protects passive receivers

Building Partnerships 

• Advance remediation and cleanup efforts where drinking water supplies are impacted by PFAS contamination
• Work with states to assess risks from PFAS contamination and the development of analytical and risk assessment tools
• Finish public comment period for biosolids risk assessment and determine path forward based on comments
• Provide assistance to states and tribes on enforcement efforts
• Review and evaluate any pending state air petitions
• Resource and support investigations into violations to hold polluters accountable

Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com, or your Babst Calland relationship attorney.

Sick of Healthcare? Healthcare Benefit Update for Employers – What to Watch in 2025

Perspective

(by Jenn Malik and Anna Hosack)

Regardless of party affiliation, the one issue that most Americans seem to be able to agree about in 2025 is that we all are sick of our healthcare system.  Healthcare reform is no stranger to the American political discourse, but recent public sentiment at the expense, difficulty, and confusion inherent in navigating the American healthcare is at an all-time low.  Americans’ dissatisfaction with the current state of the healthcare industry is unsurprising when between 2008 and 2022, the per enrollee cost of private health insurance has grown by 61.6% according to a study by the Kaiser Family Foundation.^¹ Despite rising costs, rates for denials of coverage have increased nationally with a current average of around 19%.^²  Add to these statistics the change of administration and corresponding anticipated changes in healthcare benefits policy, along with increased litigation against Plan Sponsors reminiscent of the retirement plan litigation in the late 2000s, and we are all left scratching our heads with how to provide healthcare coverage to employees at an affordable cost – especially when, according to a recent study by Forbes, two-thirds (2/3) of American employees name employer-covered healthcare as the most important benefit in considering whether to take a job.^³  Below are key issues for employers to watch in the healthcare benefits space this year to guide in planning your organization’s healthcare benefits and to budget accordingly:

Challenge to Affordable Care Act’s Preventive Care Coverage

Currently, the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, mandates that most health insurance plans must cover certain preventive services at no cost share to patients.^⁴  These services include benefits such as an annual wellness visit, maternity care, STD testing, certain immunizations for adults and children, cancer screenings, and well-baby/well-child visits.^⁵  The United States Preventive Services Task Force (USPSTF)^⁶, the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP) are various agencies tasked with recommending what benefits must be covered at no cost share under the preventive care mandate.^⁷  Proponents of the mandate argue that covering these benefits at no cost-share leads to earlier detection of serious medical conditions, earlier medical intervention, and more positive patient outcomes which can decrease the number of high-cost claims in the population and deter costs, while critics oppose the increased costs to employers/plan sponsors and may also oppose certain preventive services on religious grounds, such as the requirement to cover pre-exposure prophylaxis for HIV (PrEP) or birth control.

This April, SCOTUS is set to hear a challenge brought by Braidwood Management, Inc., and other employers to the mandate on the basis that the USPSTF, in its role as an administrative body that recommends what services are covered at no cost share, are “principal officers” who must be nominated by the U.S. President and confirmed by the Senate in accordance with the Constitution’s Appointment’s Clause.^⁸  These employers also challenged the mandate on religious grounds, arguing that the ACA’s requirement that plans cover medication for HIV prevention violated the Religious Freedom Restoration Act (RFRA).  In 2022, a Texas District Court agreed with the employers, holding that the USPSTF’s recommendations are unconstitutional because its members are officers of the United States that were not appointed in accordance with the Appointments Clause.^⁹  The District Court held that because the members were unconstitutionally appointed, all recommendations implemented by the USPSTF after March 23, 2010 (the effective date of the ACA) must be vacated and issued a nationwide injunction blocking enforcement of the ACA’s preventive care mandate.  The District Court also held that the USPSTF’s recommendation to cover PrEP at no cost share violated the RFRA.

On appeal, the Fifth Circuit Court of Appeals affirmed the District Court decision that the USPSTF members were unconstitutionally appointed; however, the Fifth Circuit held that the District Court had erred in vacating all agency actions to implement and enforce the USPSTF’s preventive care requirements and erred by enjoining enforcement nationally.^¹⁰  The Fifth Circuit limited the remedy of enjoining enforcement to the particular plaintiffs and those similarly situated in lieu of a national injunction.  The Fifth Circuit also declined to issue similar decisions against ACIP and the HRSA and issued a remand to address whether the Secretary of Health and Human Services properly ratified the recommendations of those agencies.

SCOTUS granted certiorari and will specifically review whether USPSTF members are “inferior officers” of the United States, meaning their appointment was constitutional, and whether the District Court failed to sever the allegedly unconstitutional provision.  SCOTUS denied certiorari on the Plaintiff’s cross-petition for review of whether all ACA preventive care requirements violated the non-delegation canon; consequently, all ACA preventive care requirements recommended prior to March 23, 2010 are preserved.

What employers should consider for 2025:

Until SCOTUS renders an opinion, employers subject to the ACA should continue to cover the preventive services recommended by the USPSTF at no cost-share to their employees.  If the challenge is successful, employers may be able to impose cost sharing for certain preventive services and/or benefits which may initially reduce healthcare costs.  However, it is important to remember that federal law sets the floor, and not the ceiling for required covered benefits – and that while imposing cost-sharing on employees may have an immediate financial gain in the short-term, shifting costs to employees can cause delays in care, which can lead to later medical interventions, higher cost claims, and ultimately, a sicker workforce. 

Financial Impact of Prescription Drug Developments 

Prescription drug costs are skyrocketing with prescription drug cost trends outpacing medical cost trends in 2025: according to a Segel Health Plan Cost Survey, prescription drug costs grew by 11.4% and medical costs increased by 8%.  This trend is heavily influenced by the emergence of glucagon-like peptide-1 receptor agonists (commonly known as GLP-1s) used to treat type 2 diabetes and obesity.  While the monthly cost of these drugs is low compared to some other medications, typically ranging from $900 – $1300 per month per patient, their widespread utilization by the public has left employers and health insurers scrambling with how to maintain costs.  The financial impact of GLP-1s has been so staggering that many insurers have begun to offer buy-up options to employers if they choose to include GLP-1s on their covered medications list (i.e. Formulary) for weight loss.  Proponents of GLP-1s argue that inclusion of the medications on Formulary greatly reduces other costly medical interventions such as gastric bypass surgery, and likewise reduces cardiovascular conditions such as heart attack, and stroke.  Those against coverage of GLP-1s argue that there is a lack of independent studies on the impact of long-term usage of GLP-1s, that the costs have significant negative fiscal impacts to the healthcare system,  and that the side effects cause even more high-cost claims.  Big Pharma continues to seek approvals from the FDA for expanded indications of GLP-1s including for the treatment of sleep apnea, kidney disease, and liver disease.

Additionally, the financial savings that were anticipated when biosimilars, or biologic drugs that are highly similar to an already FDA-approved biologic product, hit the market as many brand medications began to lose their patent protection has been underwhelming.  Biosimilar adoption has been slow due to concerns about safety and efficacy among healthcare providers and patients, complex Formulary and reimbursement structures that favor brand drugs over biosimilars, and lack of patient and provider education despite the significantly decreased price tag.

Specialty medications, which on average account for 50% of prescription drug spend, continue to be developed and while these medications offer life altering treatments for patients living with severe illnesses – they also come with a hefty price tag.  For example, a new treatment to cure Hemophilia B, a lifelong debilitating bleeding disorder, comes at a price tag of $3.5 Million per treatment.  While many balk at the cost, consider on average that an individual with Hemophilia averages $700,000-$800,000 in medical costs per year – so in theory the treatment would pay for itself in 4-5 years.  However, for employer-sponsored plans, a single claim of $3.5 million would have an extreme impact on renewals.

Finally, the Trump Administration announced on April 8, 2025 that his administration would soon announce tariffs on pharmaceutical imports.  While it is uncertain how Big Pharma will respond to such tariffs, it is certain that if such tariffs come into effect, they will very likely cause significant increases to how much consumers – and specifically plan sponsors/employers will spend on prescription medications.  For reference, the U.S. imported over $210 Billion in pharmaceuticals in 2024.

What employers should consider for 2025:

Employers should anticipate prescription drug costs to continue increasing and budget accordingly as GLP-1s are here to stay and increased indications for GLP-1 drugs continue to be considered by the FDA.  Employers looking to reduce costs should consider whether to cover GLP-1s for weight loss only.  Likewise, employers should speak to their carriers and pharmacy benefits managers (PBMs) about their biosimilar strategy as a means to reduce cost.  Employers should investigate copay accumulator programs as a means to leverage drug manufacturer coupon dollars to lower costs of specialty medications and consider plan design changes to their prescription benefits.  Finally, employers should prepare for the impact of tariffs on their plans’ prescription drug spends.

Challenge to Mental Health Parity and Addiction Equity Act

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally requires health plans to cover mental health and substance use disorder benefits similarly to medical and surgical benefits.  Since MHPAEA’s enactment, complex federal regulations have been published to determine whether a health plan treats these benefits in parity which has led to significant difficulty for issuers and plan sponsors in determining whether a health plan is in compliance.  In late 2020, Congress enacted the Consolidated Appropriates Act (CAA) which requires group health plans and health insurers to conduct comparative analyses to demonstrate that both quantitative treatment limitations (QTLs), or treatment limitations that are numerical in nature such as visit limits and copays, and non-quantitative treatment limitations (NQTLs), i.e. non-numerical limitations such as network access to providers, are no more stringently applied to mental health/substance abuse benefits than medical/surgical benefits.  Since 2021, plans and insurers have been required to make these comparative analyses available to the Department of Labor, HHS, and Department of Treasury (Departments), upon request – but due to the complexity of the rules, enforcement has been challenging and many plans have been found to be out of compliance.

This led to the Departments eventually publishing final rules amending the longstanding 2013 rules on September 23, 2024 (2024 Final Rules).  The 2024 Final Rules establish new NQTL standards, bolster the comparative analysis requirements that were added by the CAA, and prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health/substance use disorder benefits as compared to medical/surgical benefits when designing NQTLs.^¹¹  Some of these regulations are already in force while others begin on or after January 1, 2026.

Earlier this year, the ERISA Industry Committee (ERIC) filed suit against the Departments in the U.S. Court of Appeals for the D.C. Circuit seeking to invalidate the 2024 Final Rules, or at a minimum, invalidate key provisions and prohibit the Departments from implementing or enforcing the new rules, asserting that the 2024 Final Rules violate the U.S. Constitution and the Administrative Procedure Act and impose vague and burdensome requirements on health plans.¹²  That same day, the Departments released a report to Congress indicating that employers had made progress on complying with MHPAEA but still fell short.  The executive director of the ERIC Legal Center asserted that the new regulations “threaten the ability of employers to offer high quality, affordable coverage for the mental health and substance use disorder needs of employees and their families.”^¹³

Prior to the establishment of the 2024 Final Rules, compliance with the MHPAEA caused significant financial strain on health plans and health insurers alike, and by extension drive up compliance costs associated with healthcare benefits coverage.  If the additional requirements under the 2024 Final Rules pass constitutional muster, health insurers and plans will incur additional monitoring and reporting costs.  Additionally, though MHPAEA enforcement was a top priority for the Biden administration, it is unclear what the Trump administration’s position will be – or what impact the recent workforce cuts at the DOL and HHS will have on the enforcement of MHPAEA going forward.

What employers should consider for 2025:

The 2024 Final Rules may not be here to stay between budget constraints, federal staffing constraints, and the ERIC lawsuit targeting the 2024 Final Rule.  In the meantime, employers should monitor updates and budget accordingly for the additional requirements in the 2024 Final Rules to ensure continued compliance with MHPAEA as applicable.  

Jenn Malik is a shareholder and Anna Hosack is an associate in the public sector services group of the Pittsburgh law firm of Babst Calland, Clements & Zomnir.  Malik focuses her practice on healthcare benefits administration, insurance coverage, and appellate law.  Hosack focuses her practice primarily on municipal law, land use, and healthcare benefits law.  Contact them at jmalik@babstcalland.com and ahosack@babstcalland.com.

________________

^[1] Amin, K., Cox, C., Ortaliza, J. & Wager, E., Health Care Costs and Affordability, Kaiser Family Foundation, (May 28, 2024) https://www.kff.org/health-policy-101-health-care-costs-and-affordability/.

^[2] Lo, J., Long, M., et al, Claims Denials and Appeals in ACA Marketplace Plans in 2023, Kaiser Family Foundation, (Jan. 27, 2025) https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans-in-2023/#:~:text=Key%20Takeaways,by%20insurer%20and%20by%20state. 

^[3] O’Reilly, Dennis, Best Employee Benefits, Forbes (October 30, 2024) https://www.forbes.com/advisor/business/best-employee-benefits/#:~:text=More%20than%20half%20of%20American,as%20the%20most%20important%20benefit.

^[4] 42 U.S.C. § 300gg-13(a)(1).

^[5] Preventive Services Covered by Private Health Plans Under the Affordable Care Act, Kaiser Family Foundation (Feb. 28, 2024) https://www.kff.org/womens-health-policy/fact-sheet/preventive-services-covered-by-private-health-plans/#:~:text=The%20services%20required%20to%20be,is%20published%20or%20otherwise%20released.

^[6] The USPSTF determines what preventive services must be covered at no cost share by reviewing scientific evidence related to the effectiveness, appropriateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community, and updating previous clinical preventive recommendations. 42 U.S.C. § 299b-4(a)(1).  

^[7] The USPSTF recommends what services must be provided at no cost-share, while ACIP recommends which immunizations must be covered, and the HRSA determines what contraceptives require coverage.

^[8] Petition for a Writ of Certiorari, Becerra et al. v. Braidwood Management, Inc. et al., No. 24-316 (Sept. 19, 2024).

^[9] Memorandum Opinion & Order, Braidwood Mgmt. v. Becerra, 627 F. Supp. 3d 624 (N.D. Tex. 2022) 

^[10] Braidwood Management, Inc. v. Becerra et al., No. 23-0326 (5^th Cir. 2024).

^[11] Fact Sheet: Final Rules Under the Mental Health Parity and Addiction Equity Act (MHPAEA), U.S. Department of Labor (last visited Apr. 1, 2025) https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rules-under-the-mental-health-parity-and-addiction-equity-act-mhpaea.

^[12] See Complaint, Erisa Industry Committee v. Department of Health and Human Services et al., No. 1:25-cv-00136 (D.D.C. 2025).

^[13] Kellie Mejdrich, Trade Group Sues to Stop Federal Mental Health Parity Regs, LAW360 (Jan. 17, 2025) https://www.law360.com/articles/2286079.

EPA Announces Expansive Deregulatory Plan

Firm Alert

(by Gary Steinbauer, Jessica Deyoe and Ethan Johnson)

On March 12, 2025, U.S. Environmental Protection Agency Administrator Lee Zeldin announced a sweeping plan to “undertake 31 historic actions in the most consequential day of deregulation in U.S. history.” The announcement states that the deregulatory plan is intended to “advance President Trump’s Day One executive orders and Power the Great American Comeback.” EPA states that these actions “will roll back trillions in regulatory costs and hidden ‘taxes’ on U.S. families,” making it “more affordable to purchase a car, heat homes, and operate a business.”

The ambitious plan identifies numerous past EPA regulations or actions that will be reconsidered or reviewed. The regulations identified in the deregulatory plan, which were promulgated under the Clean Air Act, Clean Water Act, and the Resource Conservation and Recovery Act, apply to a wide range of industrial sectors and regulated parties. Although described as “31 actions,” the EPA’s primary announcement lists 22 different items, with some mentioning more than one regulation or past action set to be reconsidered or otherwise addressed as part of the plan. EPA’s list is also separated by headings that appear to correspond to separate Day One executive actions by President Trump. For each of the planned deregulatory actions, EPA issued an accompanying press release providing additional information, including, in a few cases, anticipated timelines for completing the deregulatory actions and planned interim actions.

The Babst Calland team has summarized the identified deregulatory actions and information provided by EPA in the table below:

With  limited exceptions, EPA provides few details on the timing and steps it will take for each of the identified actions. In multiple announcements, EPA states or implies that it will undertake notice and comment rulemaking under the Administrative Procedure Act. Notably, EPA does not address steps it may take in pending litigation regarding several of the identified regulations. Nor does EPA mention whether the planned deregulatory actions satisfy directives under President Trump’s other Executive Orders, such as the “Ensuring Lawful Government and Implementing the President’s ‘Department of Government Efficiency Regulatory Initiative’” and  “Unleashing Prosperity Through Deregulation” orders.

The deregulatory plan will require significant resources and time to implement at a time when EPA’s new political leadership is seeking to drastically cut costs and staff. Although several of the identified deregulatory actions may take years to complete, stakeholders subject to the identified deregulatory actions must evaluate and consider developing strategies for productively engaging with EPA during the expected rulemakings and related actions. Major environmental groups have denounced EPA’s deregulatory plan and are vowing to challenge the EPA.

Babst Calland’s Environmental Practice Group will be closely tracking the steps EPA takes to implement the deregulatory plan. Updates will be provided as significant developments arise. Babst Calland attorneys are available to provide strategic advice on how EPA’s sweeping deregulatory plan may affect your business today and in the future. For more information or answers to questions, please contact Gary Steinbauer at (412) 494-6590 or gsteinbauer@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com, or your Babst Calland relationship attorney.

[1] This announcement was not part of EPA’s main announcement of the “Biggest Deregulatory Action in U.S. History,” but it was announced separately on March 12, 2025.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

Firm Alert

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

In yet another twist in the ongoing roller coaster ride of Corporate Transparency Act (CTA) compliance, the U.S. Department of the Treasury’s (Treasury Department) Financial Crimes Enforcement Network (FinCEN) has paused enforcement of the CTA’s beneficial ownership information (BOI) reporting requirements. On February 27, 2025, FinCEN issued a press release stating that it “will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports…by the current deadlines.” Instead, FinCEN plans to issue an interim final rule by March 21, 2025 (the previously extended deadline for most reporting companies), which will set new deadlines and prioritize BOI reporting for entities that “pose the most significant law enforcement and national security risks.”

This announcement was rapidly followed by a Treasury Department press release on March 2, 2025 taking things a step further in announcing that U.S. citizens and domestic reporting companies will not be subject to any penalties or fines for failing to file or update BOI reports, even after the new reporting deadlines are established. The Treasury Department further indicated that it plans to issue a proposed rulemaking to narrow the scope of the BOI reporting requirements to foreign reporting companies only. Treasury Department Secretary Scott Bessent emphasized that the latest announcement is part of the Trump administration’s efforts to support American small businesses by removing burdensome regulations, describing the move as a “victory for common sense.”

What does this mean for reporting companies? Although we await more specific guidance and rulemaking from FinCEN, only “foreign reporting companies” (entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction) will be subject to enforcement action for failure to comply with BOI reporting requirements. “Domestic reporting companies” (entities created by the filing of a document with a secretary of state or similar office under the law of a U.S. state or Indian tribe) and U.S. citizens who are beneficial owners will not face enforcement action and will be exempted from such requirements per a future rulemaking. The impact of these recent announcements on the ongoing litigation concerning the CTA or on legislative efforts to delay or repeal the CTA remains uncertain.

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

U.S. EPA Approves Class VI Injection Well Primacy in West Virginia

Environmental Alert

(by James Curry, Christopher (Kip) Power, Gary Steinbauer, Gina Falaschi Buchman and Alexandra Graf)

On February 26, 2025, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register approving West Virginia’s application for Class VI injection well primary enforcement authority (primacy) pursuant to the Safe Drinking Water Act (SDWA) underground injection control (UIC) program. West Virginia is the first state in the Eastern U.S. to receive primacy. Primacy gives West Virginia the responsibility of overseeing and implementing a Class VI permitting program. Class VI wells are used to inject carbon dioxide into deep rock formations for permanent storage, known as carbon capture and sequestration (CCS), which is a tool used to reduce carbon dioxide emissions into the atmosphere. Point source emissions such as those from industrial facilities or power generation are common sources of carbon dioxide emissions and can be candidates for CCS. North Dakota, Wyoming, and Louisiana have already been granted Class VI primacy, and Alaska and Arizona currently have primacy applications pending with EPA. EPA has pledged to “fast-track” the agency’s review and approval of other Class VI well primacy applications.

The Class VI injection well permitting process generally starts with the applicant submitting an application, which undergoes a completeness review to ensure all required information is included. An applicant may receive a notice of deficiency or a request for additional information regarding their application. The application then undergoes a technical review to ensure the project does not pose a risk to drinking water. EPA indicates that it aims to complete its review of the permit application and issue Class VI permits “within approximately 24 months,” but states that have received Class VI permit primacy have completed the review process more quickly. Class VI well permit application requirements include site characterization, modeling to determine the impact of injection activities through the lifetime of the operation, well construction requirements, testing and monitoring throughout the life of the project, emergency and remedial response plans, operating requirements to prevent endangerment to human health or drinking water, and financial assurance mechanisms. If the application passes technical review, a draft permit is prepared and is made available for public comment period prior to the final permit being issued. Other requirements that apply to CCS projects in West Virginia are set forth in the West Virginia Underground Carbon Dioxide Sequestration and Storage Act, W.Va. Code § 22-11B-1, et seq.

CCS projects are eligible for the 45Q federal tax credit. The entity eligible to claim the tax credit is the owner of the capture equipment, and eligibility is determined based on the type of facility and its annual carbon capture thresholds. The eligibility thresholds are 1,000 metric tons of carbon dioxide for direct air capture facilities, 12,500 metric tons for industrial facilities, and 18,750 metric tons for electric generating units. Eligible projects that begin construction before January 1, 2033, can claim the tax credit for up to 12 years after being placed in service.

For more information on West Virginia’s Class VI injection well primacy, please contact any of the attorneys listed or your Babst Calland client relationship attorney.

BOI is Back: Corporate Transparency Act Reporting Requirements Reinstated

Firm Alert

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

Amid a series of ongoing legal battles, the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) have been reinstated. In light of the U.S. Supreme Court’s January 23, 2025 order in McHenry v. Texas Top Cop Shop Inc., which granted the government’s request for a stay of a nationwide injunction in a separate case challenging the BOI reporting requirements, on February 17, 2025, the U.S. District Court for the Eastern District of Texas granted the government’s motion to stay the preliminary injunction issued in Smith v. United States Department of the Treasury. As a result, U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is no longer prohibited from enforcing the CTA’s BOI reporting requirements, and reporting companies’ compliance obligations have resumed. This ruling is pending an appeal to the U.S. Court of Appeals for the Fifth Circuit.

FinCEN has announced a 30-day deadline extension for reporting companies. The new deadline for the majority of reporting companies to file an initial, updated, and/or corrected BOI report is March 21, 2025. FinCEN has also indicated that it will assess the need for further modifications to the reporting deadlines during this 30-day extension period, with a focus on lower-risk entities.

In parallel, BOI reporting requirements are receiving legislative attention. The Protect Small Business from Excessive Paperwork Act of 2025 unanimously passed the U.S. House of Representatives and a companion bill is awaiting action in the Senate. If enacted, reporting companies formed before January 1, 2025 will have until January 1, 2026 to comply with the BOI reporting requirements.

Reporting companies must ensure they are prepared to meet the March 21, 2025 filing deadline. While further adjustments may be forthcoming, companies are advised to remain proactive in their compliance efforts.

Babst Calland will continue to monitor regulatory and judicial updates. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you would like Babst Calland to assist you with your company’s compliance obligations. Babst Calland will only provide advice related to BOI reporting compliance when explicitly requested to do so. We look forward to servicing your needs on this developing area of the law.

Employer Guidance for Workplace Interactions with ICE

Employment and Labor Alert

(by Steve Antonelli and Alex Farone)

The new presidential administration’s efforts to prioritize immigration law enforcement has resulted in increased activity by U.S. Immigration and Customs Enforcement (ICE) and an uptick of questions from employers about how to handle ICE investigations. This Alert provides guidance to employers for potential interactions with or inspections by ICE at the workplace, including preliminary actions, suggested steps during an ICE visit (whether announced or unannounced), and follow-up recommendations.

There is a common misconception that only employers that specifically seek or intentionally hire unauthorized workers are at risk of a visit from ICE. However, there are multiple avenues by which a generally law-abiding employer may find itself unknowingly employing an unauthorized worker. For example, an individual may have presented the employer with fraudulent documentation for the Form I-9 employment eligibility verification, and the employer may not have realized the document was inauthentic. Or an employer may have lawfully hired a noncitizen with proper employment paperwork but later may forget to reverify the worker’s Form I-9; in this instance, the individual’s work authorization could lapse or expire without the employer noticing.

To the extent an employer’s office or work facility is private property, employers have certain legal rights when faced with an ICE arrival. Employers should become familiar with their rights and best practices in the event of an ICE visit to minimize the risk of inordinate disruption to the workforce or operations, or the unauthorized seizure of company property and information. Employers should seek to balance (1) lawful compliance and cooperation with (2) private property rights and a general duty of care for employees.

Babst Calland recognizes that the topics of immigration enforcement and undocumented persons have been politicized. We therefore offer this guidance objectively, without advocating for any particular position beyond what is legally required.

Recommended Precautionary Actions Before ICE Arrives

1. Designate Public and Private Spaces
   ICE agents can only be present in areas open to the public (such as parking lots, reception areas, lobbies, etc.) without a judicial warrant or specific employer consent. Therefore, employers should clearly identify the boundaries of non-public areas with signs such as “Private” or “Non-Public Area” to avoid ambiguity. Once signs are posted, management should explain these “new” boundaries or designations to the workforce, with special emphasis on its explanation to security guards, receptionists, and other public-facing employees.

2. Understand the Types of Documents ICE Could Present
   With a few exceptions, ICE generally cannot lawfully search persons or private spaces, or seize persons or private property, without certain documentation.^[1] As explained below, employers should ensure that key personnel are trained to identify and/or differentiate these documents.A judicial warrant provides the broadest search and/or seizure rights. A judicial warrant can be either a search warrant or an arrest warrant. A judicial warrant must be signed and dated by a judge or magistrate and it must describe with particularity the place to be searched, and/or the person or items to be seized. A judicial warrant will have the name of a court at the top of the document. Only a valid judicial warrant permits an ICE agent to enter private/non-public spaces at the workplace, and only a valid judicial warrant requires cooperation. Employers must strictly comply with judicial warrants, but it is not required to take any action to assist ICE beyond what is reasonably required by the judicial warrant. For example, an employer can be required to move an employee identified in the warrant into a contained area for questioning, but it cannot be required to sort employees into groups by citizenship status or nationality for an inspection by ICE.An administrative warrant is much more limited than a judicial warrant. An administrative warrant is signed by an immigration officer, and it allows ICE to arrest noncitizens suspected of committing immigration violations. An administrative warrant is typically identified as a document issued by the “Department of Homeland Security” and is usually on a Form I-200 or I-205. Notably, an administrative warrant does not give an ICE agent the right to enter private/non-public spaces at the facility unless the employer consents.^[2] Additionally, when faced with an administrative warrant, an employer is not required to tell ICE whether the employee named in the warrant is currently working or to bring the employee to the agent (or vice versa).

   Alternatively, ICE could present an employer with a subpoena, a notice of inspection, or a notice to appear. A subpoena is a written request for information or documents that provides a certain time limit to respond and does not require immediate compliance. Like a subpoena, a notice of inspection is a document informing an employer that it must produce employees’ I-9 Forms for an audit^[3] within 3 business days. A notice to appear is a document directed to an individual instructing them to appear before an immigration judge.

3. Assign an On-Site Response Coordinator
   Employers should assign a particular managerial or supervisory employee at each facility to be the on-site response coordinator who can serve as a single point of contact with ICE in the event that ICE arrives, as well as a back-up coordinator if the designated worker is absent or unavailable. These personnel should be trained to differentiate between the above-described documents, and to understand and be aligned with the employer’s policy for lawful compliance with visits from ICE.

4. Review Applicable Collective Bargaining Agreements
   For any locations that have a unionized workforce, employers should review the applicable collective bargaining agreements (CBAs) proactively to determine whether they require any additional conduct by the employer in the event of an ICE visit. For example, some CBAs might include provisions that give the union the right to be present during any ICE inspections or on-site employee interviews, or require that the employer notify all union employees when ICE agents arrive. Any additional CBA requirements should be implemented with the below recommended actions for facilities with unionized employees.

Recommended Actions If ICE Arrives

*All recommended actions below should be conducted in a calm, professional, and polite manner to prevent escalation of the interaction.*

1. Notify key personnel – The first steps are to immediately notify the facility supervisor, the on-site response coordinator(s), and legal counsel. Ask the agents to wait in a specific space or designated location until either a supervisor, on-site response coordinator, or legal counsel arrives to prevent disruption. 

2. Verify agent identity – The response coordinator should clarify whether the agents are police officers or ICE agents and request their names and badge numbers.

3. Verify agent purpose – The response coordinator should ask the agents about the nature of their visit. Common purposes include:

• • Initiation of Form I-9 Audit – If ICE intends to audit a company’s Form I-9 compliance, ICE must first provide the employer with a Notice of Inspection. These notices give employers at least 3 business days to produce the requested I-9 Forms.^[4] Additional productions and procedures will ensue if ICE determines that there are any Form I-9 errors, suspicious documents, or discrepancies, and employers should consult with an immigration attorney for further guidance if this occurs.
  • Facility Search or “Raid” – ICE can arrive without warning to investigate an employer.
  • Detention of specific person(s) – ICE can arrive without warning to detain specific person(s).
  • Fraud Detection and National Security (FDNS) visit – this is an unannounced visit related to an employer’s recent immigration petition(s) where ICE agents conduct compliance reviews to ensure the employer is complying with the terms and conditions of the petition(s). This guidance does not address such visits, as FDNS visits are only relevant for employers who have had an H-1B or L-1 intracompany transfer petition(s) adjudicated.

4. Verify documentation – The response coordinator should ask to see a warrant.

• • If a judicial warrant is provided, employers should analyze it to determine its scope and ask for a copy of it. Employers are not required to provide access to any area not specified in the warrant.
    • If a judicial warrant is not provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”
    • If there is an issue with the judicial warrant (i.e. it is not signed, not dated, is missing the correct workplace address, or does not sufficiently describe the premises to be searched or items to be searched for), an employer can accept the warrant but should note its objection so that counsel can challenge the search or seizure later if sufficient grounds exist. To be clear, in this instance, the search or seizure will still occur.
    • Ask to be provided with a list of any items seized during the search.
  • If an administrative warrant is provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”

5. Use independent judgment if considering voluntary consent.

1. • Employers can decide to voluntarily consent to a search or seizure of employer property by ICE without a sufficient warrant. Moreover, ICE agents are permitted to make statements intended to encourage voluntary consent or to imply that giving consent is required even in circumstances where it is not (such as when the agents do not possess a judicial warrant).
   • If considering consenting to a search or seizure without a sufficient warrant, employers should use independent judgment to evaluate the totality of the circumstances in addition to any statements made by the agents.
   • Please note that non-management or non-supervisory employees do not have the authority to act on behalf of an employer to give such consent.

6. Be respectful, but clear, if exercising the company’s rights.

• • Never attempt to block an ICE agent’s movements. If an employer believes ICE is exceeding its authority, the response coordinator can voice the employer’s objection and state that the company does not consent, but they should not argue and never physically interfere with the agent’s actions.
  • If agents attempt to seize something that is critical to company operations (such as a computer, proprietary information, or an important file), explain why the item is critical to the company’s operations, request a more limited or targeted seizure, and/or ask to make a copy of the information before it is seized.
  • Employers can notify employees that they have the right to remain silent, but employers cannot instruct employees not to respond to questions. Company representatives should not be confrontational, obstructive, or evasive.
  • Employers and employees alike have the right to record an encounter with ICE. Consider recording interactions with ICE agents to clearly document statements and actions. Efforts to record an encounter should never interfere with the agents’ activities.

Recommended Actions After ICE Visit

1. Document as much as possible – The response coordinator should interview employees and make a record of the details of the event in an incident report. The report should include details such as the number of agents, a description of what they were wearing, whether the agents kept anyone from moving around the workplace freely, a detailed list of the locations of any search (including smaller spaces such as closed drawers), a detailed description of any property seized, a detailed list of statements made by the employer declining consent or asserting legal rights, and any statements made by the agents.

2. Follow-up notifications – employers should call legal counsel immediately to discuss next steps. If the workplace is unionized, employers should notify the union that ICE visited the workplace.

3. Engage and encourage open communication with and among the workforce – Employers should be open and honest with the workforce about what occurred. In addition to individual instances of absenteeism, fear of action by ICE may lead to employees discussing their concerns or voicing disagreement with the employer’s response (or potential response) to ICE. Employers must be aware that certain employee collective action (discussions, protests, other concerted activity, etc.) may be protected under the National Labor Relations Act if it relates to the terms and conditions of employment, even for non-union workers or those who may not be authorized to work in the U.S. 

4. Provide reasonable leave – If ICE detains a worker, consider providing the worker with an unpaid leave of absence during and in the immediate aftermath of the detention. While not legally required, an employer could consider handling the matter in a manner similar to the leave that might be provided in the event of a sudden medical issue or other unexpected absence. Failure to provide such comparable leave could give rise to a claim for national origin discrimination. Employers are never, however, required to provide employees with indefinite leaves of absence.

If you have any questions about additional employer guidance concerning workplace investigations by ICE or any other federal or state agency, please contact Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com or Stephen A. Antonelli at (412) 394-5668 or santonelli@babstcalland.com.

________________

^[1] While police officers are allowed to search and arrest without a warrant in the event of different types of emergencies such as while in “hot pursuit” of a criminal suspect, ICE agents are not police officers (regardless of whether their uniforms say “Police”). ICE agents may not search and seize without a warrant if they are merely in “hot pursuit” of a suspected undocumented person. Under applicable law, this type of warrantless search or seizure is only permitted if the agent is in “hot pursuit” of an individual who “poses a public safety threat” or who the agent personally observed crossing the border.

^[2] One key exception is the “in plain view” principle. With or without a warrant, ICE agents are always allowed to look at anything in “plain view,” including computer screens or papers sitting out on desks, or listen to audible conversations that can be overheard without a listening device. If what the agent sees or hears in “plain view” gives them probable cause that unlawful activity is, has, or will occur, they can search the relevant private area and seize relevant items without a warrant.

^[3] The Form I-9 is a document used to verify the identity and employment eligibility of individuals within the United States. Federal law requires employers to create and maintain I-9 Forms and supporting documentation for all employees.

^[4] Employers are cautioned against voluntarily consenting to a search or seizure of the Forms I-9 if ICE agents do not have a judicial warrant for this information or if the 3-day period after receiving a Notice of Inspection has not yet expired. The Form I-9 rules are nuanced and strict, and it is very common for employers to unknowingly violate a rule due to an unintended error on the forms or in record-keeping. Employers can be subject to monetary fines for substantive violations and any uncorrected technical violations regardless of whether the violation was intentional.

Trump Administration Day One Executive Orders: A Transformation of American Energy and Environmental Policies

Firm Alert

(by Ben Clapp, Gary Steinbauer, Mackenzie Moyer, Christina Puhnaty and Alexandra Graf)

On January 20, 2025, the Trump administration issued a suite of Executive Orders and memoranda signaling a dramatic shift in American energy and environmental policy.  Collectively these actions, among a historically large array of “Day One” orders issued by the administration, aim to stimulate domestic energy production (with a focus on oil, natural gas, coal, hydropower, biofuels, critical minerals, and nuclear energy resources), expand energy transmission infrastructure, enlarge refining capacity, and streamline environmental permitting and review requirements for energy production and infrastructure projects while canceling Biden-era domestic climate policies, disengaging from international climate agreements, and curtailing leasing and permitting for offshore and onshore wind energy projects.

In conjunction with these Executive Orders and memoranda, the Trump administration carried out a sweeping revocation of Biden-era Executive Orders, including orders relating to energy policy and environmental regulation, climate initiatives, promoting electric vehicles, environmental justice, the withdrawal of areas of the Outer Continental Shelf from oil and gas leasing, and the implementation of the Inflation Reduction Act and Infrastructure Investment and Jobs Act.

President Trump also issued a Day One memorandum implementing a regulatory freeze requiring agencies to refrain from proposing or issuing any new rule and withdraw rules that have been finalized but not yet been published in the Federal Register, until those rules are approved by the new agency head. The memorandum also directs agency heads to consider postponing for 60 days the effective date of any rules that have been published or issued but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.  Some Biden-era rules relating to energy and the environment appear to be subject to this freeze, however, the overall impact of the freeze appears to be limited.

More detailed reviews of these actions are available at the links below.

• Energy Policy
• Regulatory Freeze 
• Key Environmental Regulatory, Permitting, and Enforcement Implications 

Additional actions by President Trump on energy and environmental issues are expected, and legal challenges are practically certain as federal agencies take concrete steps to implement these directives. We are tracking these matters closely and will issue future Alerts as significant developments arise.  As always, Babst Calland attorneys are available to provide guidance on how these actions affect your business. For more information on the actions discussed in these Alerts or related matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, or your Babst Calland client relationship attorney.

Trump Administration Day One Executive Orders: Energy Policy

Firm Alert

(by Ben Clapp, Alexandra Graf and Mackenzie Moyer)

The Trump administration issued several Executive Orders aimed at significantly altering American energy policy, which are summarized below.

Executive Order: Declaring a National Energy Emergency

Fundamental to President Trump’s efforts to stimulate American energy production is his Executive Order declaring a national energy emergency. This is the first time that a president has declared a national energy emergency, although regional energy emergencies were declared by President Jimmy Carter in the 1970s due to shortages of fossil fuels. By declaring a national energy emergency, President Trump is allowing federal agencies to use various emergency authorities to facilitate the “identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.” The Order defines “energy” and “energy resources” to include “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.”

The Order represents the administration’s first step in promoting domestic energy production which, according to the Order, will lower energy prices, create jobs, and strengthen national security. In furtherance of these objectives, the Order directs federal agencies to identify and use all relevant lawful emergency and other authorities to expedite the completion of all authorized and appropriated infrastructure, energy, environmental, and natural resources projects.

Among the more significant provisions in the Order to the regulated community are directives to agencies to evaluate the use of emergency measures in environmental regulations to facilitate and streamline permitting and environmental reviews.  Federal agencies must identify and report on planned or potential actions to facilitate energy supply that may be subject to emergency treatment under the regulations and nationwide permits promulgated by the Army Corps of Engineers, such as projects subject to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. The Order provides similar requirements for actions that may require agency consultations under the Endangered Species Act (ESA). Agencies must identify and report on planned or potential actions that may be subject to the ESA and provide a summary report of those actions. Agencies are directed to use, to the maximum extent permissible under applicable law, the ESA regulations on consultations in emergencies.

Additionally, the Secretary of the Interior, acting as Chairman of the Endangered Species Act Committee, must convene the committee not less than quarterly to review and consider applications submitted by any applicant for a permit or license who requests an exemption from the agency consultation obligations imposed by Section 7 of the ESA. To the extent practical, the Secretary of the Interior must ensure an initial determination is made on applications within 20 days of receipt and the submission must be resolved within 140 days of the initial determination.

Executive Order: Unleashing American Energy

President Trump’s declaration of an energy emergency dovetails with his Executive Order entitled Unleashing American Energy. The Order directs federal agency heads to review all existing agency actions and identify those that unduly burden domestic energy resources and, within 30 days, develop and begin implementing action plans to suspend, revise, or rescind all such actions.  It calls for a particular focus on oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources. The Order also directs agencies to notify the Attorney General of any actions taken to review or suspend, revise or rescind regulations so that (i) notice of the Order and such actions can be provided to any court with jurisdiction over pending litigation in which such actions may be relevant and (ii) a request can be made to the court stay or otherwise delay further litigation, or seek other appropriate relief consistent with the Order.

The Order also focuses on increasing permitting efficiency across agencies, in part by revoking President Carter’s 1977 Executive Order 11991 relating to protection and enhancement of environmental quality, which authorized the Council on Environmental Quality (CEQ) to issue mandatory regulations to implement the National Environmental Policy Act (NEPA).  The Order requires CEQ to provide guidance on implementing NEPA and to issue a proposed rule rescinding CEQ’s current NEPA regulations.  It also encourages agencies to eliminate permitting delays in their respective processes by utilizing general permits and permit by rule and authorizes the use of emergency authorities for any project an agency head has determined is essential to the nation’s economy or national security.  The Director of the National Economic Council (NEC) and the Office of Legislative Affairs are also directed to jointly prepare recommendations to Congress to streamline judicial review of NEPA applications, facilitate permitting, and construct interstate energy transportation and infrastructure.

The Order requires the Environmental Protection Agency (EPA) to issue guidance to address abandoning the social cost of carbon calculations in decision making within 60 days of the Order, and within 30 days of the Order, EPA must submit recommendations on the legality and future applicability of the 2009 Endangerment Finding for greenhouse gases under the Clean Air Act.

Significantly, the Order directs all agencies to pause the disbursement of funds appropriated through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act pending review, including funds for electric vehicle charging stations, and review agency processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds.

The Order also contains provisions pertaining to liquified natural gas, which lifted a freeze on liquified natural gas exports put in place by President Biden in early 2024.  The Order directs the Secretary of Energy to restart reviews of the applications for approvals of liquified natural gas export projects, and reconsider records of decision for proposed deepwater ports for the export of liquified natural gas.

Finally, the Order contains components on mineral dominance, which directs relevant agencies to identify and rescind all agency actions that unduly burden domestic mining and processing of non-fuel minerals.  It also provides for geological mapping to focus on unknown mineral deposits, tapping into the potential of uranium, allocating federal funds for critical mineral projects, and requires that policy recommendations pertaining to enhancing mining competition in the United States be submitted by relevant agencies within 60 days of the Order.

Memorandum: Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects

The Trump administration’s efforts to promote the production of energy from traditional energy sources stand in contrast to President Trump’s Memorandum aimed at curtailing wind energy production by withdrawing the Outer Continental Shelf (OCS) from offshore wind leasing and reviewing all leasing and permitting practices for wind energy projects. The Memorandum temporarily prevents consideration of any area in the OCS for any new or renewed wind energy leasing for the purposes of generation of electricity or any other such use derived from the use of wind. It directs the Secretary of the Interior, in consultation with the Attorney General, to conduct a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identify any legal bases for such removal, and submit a report with recommendations to the President.  Finally, it directs that no new or renewed approvals, rights of way, permits, leases, or loans for onshore or offshore wind projects be issued pending the completion of a comprehensive assessment and review of federal wind leasing and permitting practices.

Executive Order: Unleashing Alaska’s Extraordinary Resource Potential

President Trump also issued an Executive Order entitled Unleashing Alaska’s Extraordinary Resource Potential. The Order’s more significant provisions include directing agencies to prioritize the development of Alaska’s LNG potential, including the permitting of all necessary pipeline and export infrastructure related to the Alaska LNG Project, and to issue permits, right-of-way permits, and easements necessary for the exploration, development, and production of oil and gas from leases within the Arctic National Wildlife Refuge.

As always, Babst Calland attorneys are available to provide guidance on how these actions affect your business. For more information on the actions discussed in this Alert or related matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Mackenzie Moyer at (412) 394-6678 or mmoyer@babstcalland.com, Alexandra Graf at (412) 394-6438 or agraf@babstcalland.com, or your Babst Calland client relationship attorney.

To view other “Day One” Executive orders issued by the Trump administration affecting energy and environmental policy, please click here.

Trump Administration Day One Executive Orders: Regulatory Freeze

Firm Alert

(by Ben Clapp, Gary Steinbauer and Christina Puhnaty)

Among the flurry of executive orders that President Trump issued in the hours following his inauguration on January 20^th was a memorandum titled Regulatory Freeze Pending Review (2025 Trump Regulatory Freeze Memorandum), which directs agencies to:

1. Refrain from proposing or issuing any rule^[1] in any manner until a President Trump-appointed agency head reviews and approves the rule;
2. Immediately withdraw any rules that have been sent to the Office of Federal Register (OFR) but not published in the Federal Register so that they can be reviewed and approved by a President Trump-appointed agency head; and
3. Consider^[2] postponing for 60 days the effective date for any rules that have been published or issued but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.

This memorandum closely mirrors regulatory freeze memoranda issued by the first Trump administration in 2017 (2017 Trump Regulatory Freeze Memorandum) and the Biden administration in 2021, but the immediate impact of the memorandum will likely be different from what we have seen in the past. Six days after the Trump administration issued the 2017 Trump Regulatory Freeze Memorandum, EPA published in the Federal Register a final rule delaying the effective date of 30 final EPA regulations that the agency had published between October 28, 2016 and January 17, 2017. 82 Fed. Reg. 8499 (Jan. 26, 2017). These rules had original effective dates after January 20, 2017, the date that President Trump issued the 2017 Trump Regulatory Freeze Memorandum. Several agencies in the Biden administration, however, including EPA, appear to have been prepared for a regulatory freeze memorandum and avoided issuing final regulations at the end of 2024 that would go into effect after President Trump’s inauguration. For example, EPA’s rule implementing the requirements of the Waste Emissions Charge in the Clean Air Act’s Methane Emissions Reduction Program, enacted as part of the Inflation Reduction Act, went into effect on January 17, 2025. 89 Fed. Reg. 91094 (Nov. 18, 2024).

Nonetheless, some environmental and energy-related regulations may be affected by the freeze. For example, on January 21^st, EPA’s final rule regarding Revisions to the Air Emission Reporting Requirements and proposed rule regarding Clean Water Act Effluent Limitations Guidelines and Standards for PFAS Manufacturers Under the Organic Chemicals, Plastics and Synthetic Fibers Point Source Category were both identified on the White House’s Office of Management and Budget’s (OMB) website as under review, but as of January 22^nd are no longer identified as under OMB review and do not appear on OFR’s website. EPA may have withdrawn these rules from OMB’s consideration in accordance with the 2025 Trump Regulatory Freeze Memorandum, but their status remains unclear.

In addition, the Pipeline and Hazardous Materials Safety Administration (PHMSA) made available on its website pre-publication versions of proposed and final rules that have been submitted to the OFR but are not yet available for public inspection or published in the Federal Register. See Proposed Rule: Safety of Carbon Dioxide and Hazardous Liquid Pipelines; Final Rule: Gas Pipeline Leak Detection and Repair.  These proposed and final rules are subject to the regulatory freeze in accordance with the memorandum’s directive that agencies “[i]mmediately withdraw any rules that have been sent to the [OFR] but not published in the Federal Register” so that they can be reviewed and approved by a President Trump-appointed agency head. Both of these rules appear to have been withdrawn from publication in the Federal Register.  However, we also note that EPA published a proposed rule on January 22^nd that was seemingly subject to the freeze. See National Emission Standards for Hazardous Air Pollutants: Chemical Manufacturing Area Sources Technology Review, 90 Fed. Reg. 7942 (Jan. 22, 2025). In sum, there appears to be some open questions on the status of certain rules not yet published in the Federal Register.

Lastly, final environmental regulations that have been published in the Federal Register as final but that have not yet gone into effect include the following EPA final rules:

1. Review of the Secondary National Ambient Air Quality Standards for Oxides of Nitrogen, Oxides of Sulfur, and Particulate Matter, 89 Fed. Reg. 105692 (Dec. 27, 2024) (eff. Jan. 27, 2025);
2. Integrating e-Manifest With Hazardous Waste Exports and Other Manifest-Related Reports, PCB Manifest Amendments, and Technical Corrections, 89 Fed. Reg. 60692 (Sept. 26, 2024) (eff. Jan. 22, 2025); and
3. Hazardous Waste Generator Improvements Rule, the Hazardous Waste Pharmaceuticals Rule, and the Definition of Solid Waste Rule; Technical Corrections, 89 Fed. Reg. 99727 (Dec. 11, 2024) (eff. Feb. 10, 2025).

Per the 2025 Trump Regulatory Freeze Memorandum, EPA is to consider postponing for 60 days the effective date of these rules for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.

How quickly agencies will be able to initiate review and approval of these regulations depends on the Trump administration’s immediate priorities and how quickly agency roles are filled with President Trump appointees.

As always, Babst Calland attorneys are available to provide guidance on how these actions affect your business. For more information on the actions discussed in this Alert or related matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Christina Puhnaty at (412) 394-6514 or cpuhnaty@babstcalland.com, or your Babst Calland client relationship attorney.

To view other “Day One” Executive orders issued by the Trump administration affecting energy and environmental policy, please click here.

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^[1] The 2025 Trump Regulatory Freeze Memorandum defines “rule” to include both final rules and “any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.”

^[2] The use of the word “consider” is one notable difference between the 2017 and 2025 memoranda issued by the Trump administration. The postponement directive in the 2017 Trump Regulatory Freeze Memorandum was not optional.

Trump Administration Day One Executive Orders: Key Environmental Regulatory, Permitting, and Enforcement Implications

Firm Alert

(by Ben Clapp and Gary Steinbauer)

President Trump’s first-day executive actions prioritize the development of a wide-range of domestic energy resources and take direct aim at the climate initiatives and environmental justice priorities of the Biden administration. With the declaration of a national energy emergency, President Trump has required the U.S. Environmental Protection Agency (EPA) and other federal agencies to review numerous agency actions and authorities with the goal of “unleashing American energy.” These first-day executive actions do not themselves implement the desired changes, but the environmental ripple effects and legal challenges stemming from these initial actions will unfold in the weeks, months, and years ahead and are likely to involve nearly every major federal environmental law. In this Alert, we summarize key federal environmental regulatory, permitting, and enforcement implications from President Trump’s initial executive actions.

• Review of Existing Regulations and Regulatory Freeze. EPA and other federal regulatory agencies are ordered to review and identify existing regulations and policies that unduly burden domestic energy resources and develop and begin implementing plans to expeditiously suspend, revise, or rescind the identified regulations and policies. The universe of agency actions that must be reviewed include those related to the production of oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources.^[1] Regulations and policies that unduly burden domestic mining and processing of non-fuel minerals are also covered by this mandate.^[2] As is customary for a new administration, President Trump has issued a regulatory freeze designed to pause certain types of pending regulatory actions until new leadership at EPA and other agencies have an opportunity to review such actions.^[3]  More information regarding potential EPA rules that may be subject to the regulatory freeze can be found in this separate Alert.
• Environmental Regulatory Litigation and Enforcement Implications. President Trump directed EPA and other agencies to identify unduly burdensome agency actions that are the subject of pending litigation and notify the Attorney General of these actions so that the Attorney General can seek to stay or otherwise delay these lawsuits until challenged regulations can be suspended, revised, or rescinded as ordered.^[4] President Trump also ordered EPA to review and identify existing settlements and consent orders that impose an undue burden on identification, development, and use of domestic energy resources. EPA will have 30 days to report any settlements and consent orders to the Office of Management and Budget (OMB).^[5] Lastly, federal agencies are directed to assess whether enforcement discretion can be utilized to advance the Trump administration’s domestic energy policy.^[6]
• Emergency Authorities and Streamlining Permitting for Domestic Energy Projects. President Trump has issued broad mandates to the EPA and other federal resource agencies to identify and use “lawful emergency authorities” to facilitate generation of non-wind domestic energy resources and related infrastructure, including emergency authorities under the Clean Water Act Section 404 permitting program and the Endangered Species Act.^[7] President Trump revoked a 1970’s Executive Order giving the White House Council on Environmental Quality (CEQ) the authority to issue National Environmental Policy Act (NEPA) regulations and directed the CEQ to propose to rescind existing NEPA regulations to expedite and simplify permitting for energy projects.^[8] EPA is directed to consider issuing emergency fuel waivers allowing for the year-round sale of E15 gasoline, and the review of applications for liquefied natural gas projects are to be restarted.^[9]
• Climate-Related Regulatory Underpinnings and Considerations. President Trump revoked President Biden’s Executive Orders related to climate initiatives.^[10] In addition to withdrawing from the Paris Climate Agreement,^[11] President Trump directed EPA to abandon the consideration of the “social cost of carbon” in regulatory determinations and submit a recommendation on the fate of the 2009 finding under the Clean Air Act that greenhouse gases threaten public health and welfare, which serves as a necessary statutory prerequisite for EPA to implement greenhouse gas emission standards for motor vehicles and other sectors.^[12] All federal agencies are directed to pause clean energy and climate-related funding under the Inflation Reduction Act and Infrastructure Investment and Jobs Act, and the Trump administration has pledged to “eliminate the ‘electric vehicle (EV) mandate.’”^[13] 

President Trump’s first-day executive actions set the stage for reshaping the federal environmental regulatory, permitting, and enforcement landscape. The actions EPA and other agencies take to implement these new directives will be closely watched and scrutinized.

As always, Babst Calland attorneys are available to provide guidance on how these actions affect your business. For more information on the actions discussed in this Alert or related matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, or your Babst Calland client relationship attorney.

To view other “Day One” Executive orders issued by the Trump administration affecting energy and environmental policy, please click here.

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^[1] Executive Order: Unleashing American Energy, Section 3 (Jan. 20, 2025).

^[2] Executive Order: Unleashing American Energy, Section 9(a) (Jan. 20, 2025).

^[3] Memorandum: Regulatory Freeze Pending Review (Jan. 20, 2025).

^[4] Executive Order: Unleashing American Energy, Section 3(b)-(d) (Jan. 20, 2025); see also Executive Order: Ending the Weaponization of the Federal Government (Jan. 20, 2025), Sec. 3(a) (requiring the Attorney General and heads of all departments and agencies to review civil and criminal enforcement activities over the last 4 years to identify instances where such authority was used to target perceived political opponents).

^[5] Executive Order: Unleashing American Energy, Section 3(b) (Jan. 20, 2025).

^[6] Executive Order: Unleashing American Energy, Section 7(c) (Jan. 20, 2025).

^[7] Executive Order: Declaring a National Emergency, Section 2 (Jan. 20, 2025).

^[8] Executive Order: Unleashing American Energy, Section 5 (Jan. 20, 2025).

^[9] Executive Order: Declaring a National Emergency, Section 2(b) (Jan. 20, 2025); Executive Order: Unleashing American Energy, Section 8 (Jan. 20, 2025).

^[10] Executive Order: Unleashing American Energy, Section 5 (Jan. 20, 2025).

^[11] Executive Order: Putting America First in International Environmental Agreements, Section 4.

^[12] Executive Order: Unleashing American Energy, Section 6 (Jan. 20, 2025).

^[13] Executive Order: Unleashing American Energy, Sections 2(e) and 7 (Jan. 20, 2025).

PFAS: A New Four-Letter Word in Environmental Law? Updates from 2024 and Predictions for 2025

Environmental Alert

(by Sloane Wildman, Joseph Schaeffer and Jessica Deyoe)

The final year of the Biden administration saw several significant developments related to the regulation of per- and polyfluoroalkyl substances, more commonly known as PFAS. These developments included the U.S. Environmental Protection Agency’s designation of the two most common PFAS compounds as hazardous substances under federal cleanup laws and its limitation of six PFAS compounds under federal drinking water regulations, among others. The past year also saw a growing number of PFAS-related lawsuits, which are currently in various stages of litigation. What could happen to all these developments in 2025? Can the Trump administration change these rules and policies? What about the numerous PFAS related lawsuits that have been filed in the past year?  This update takes a look at some of the more significant PFAS-related developments from the past year and considers what might happen in 2025 and beyond.

What are PFAS and what were the prior administration’s PFAS priorities?

The term “PFAS” encompasses thousands of manmade chemicals.  PFAS compounds have been widely used for decades in various applications, including manufacturing water-, stain-, and heat-resistant consumer products, e.g., waterproof clothing and food packaging, and as ingredients in aqueous film forming foams (known as AFFF) used to extinguish certain kinds of chemical fires. There is research indicating that exposure to certain PFAS, which are prevalent and persistent in the environment, may cause various health-related impacts. In an effort to address the impacts related to PFAS, in 2021, the Biden administration published a “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024” identifying a number of regulatory priorities that the administration planned to take during its four-year term. The Strategic Roadmap and annual progress reports are available here.

What were some of the most significant federal regulatory developments in 2024?

Two of EPA’s more significant regulatory actions in 2024 occurred almost back-to-back in April with its designation of two PFAS compounds as hazardous substances under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and its rule imposing regulatory limits on six PFAS compounds under the Safe Drinking Water Act (SDWA).  We reported on both of these developments in updates available here and here.

Specifically, in April 2024, the EPA published a final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), and their salts and structural isomers, as “hazardous substances” under CERCLA, available here. As we reported previously, EPA’s designation of PFOA and PFOS as CERCLA hazardous substances was unprecedented and controversial because it was the first time the Agency used its statutory authority under CERCLA to designate a hazardous substance.  Until that point, hazardous substances under CERCLA had only been defined by reference to other statutes (e.g., the Clean Water Act and the Resource Conservation and Recovery Act).  Among other things, the rule requires parties to report unpermitted releases of PFOA and/or PFOS at or above the applicable “reportable quantity” (one pound or more within a 24-hour period) to federal, state, and local authorities.  It also imposes certain obligations on federal agencies when selling and transferring federally owned real property. And most significantly, the rule provides the federal government with additional authority under CERCLA to address PFOA/PFOS contamination in the environment, allows private parties who conduct cleanups consistent with CERCLA’s National Contingency Plan to seek to recover PFAS cleanup costs from other potentially responsible parties (PRPs), and potentially affects closed sites with existing remedies.  At the same time EPA published the final CERCLA rule, it issued a policy memorandum, “PFAS Enforcement Discretion and Settlement Policy Under CERCLA” summarizing the Agency’s intent to use its discretion to not “pursue entities where equitable factors do not support seeking response actions or costs under CERCLA . . . .”  and generally focus on so-called “major PRPs” – parties who, in EPA’s view, “have played a significant role in releasing or exacerbating the spread of PFAS into the environment, such as those who have manufactured PFAS or used PFAS in the manufacturing process, and other industrial parties.” Some industries that would be protected under this Policy, including publicly owned treatment works and publicly owned/operated municipal solid waste landfills, expressed concern that the policy provides only discretionary rather than mandatory protection and that it does not prevent other PRPs from pursuing claims against them.

Also in April 2024, EPA published a National Primary Drinking Water Regulation establishing the first-ever national enforceable drinking water standards for six PFAS under the Safe Drinking Water Act (SDWA), available here. The rule sets enforceable Maximum Contaminant Levels (MCLs) and non-enforceable health-based Maximum Contaminant Level Goals (MCLGs) for PFOA and PFOS, and four additional PFAS compounds – perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), and perfluorohexane sulfonic acid (PFHxS).  EPA set MCLs (the maximum concentrations allowed in drinking water that can be delivered to the users of a public water system) at 4.0 parts per trillion (ppt) for PFOA and PFOS and 10 ppt for PFNA, PFHxS and HFPO-DA. In addition, EPA set MCLGs at 0 parts per ppt for PFOA and PFOS and at 10 ppt (same as the enforceable MCL) for PFNA, PFHxS and HFPO-DA. Under the rule, public water systems are given until 2027 to complete initial monitoring of each of the six PFAS, followed by ongoing compliance monitoring, and until 2029 to implement solutions to reduce PFAS where MCLs are exceeded. After those five years, public water systems that exceed one or more of the MCLs must take action to reduce PFAS levels and provide notice to the public of the violation.

In 2024, EPA proposed other rules related to PFAS that have not yet been finalized. For example, in February 2024, EPA published two proposed rules to address PFAS and other emerging contaminants under the authority of the Resource Conservation and Recovery Act (RCRA). First, EPA proposed to add nine PFAS (including their salts and structural isomers) to the list of “hazardous constituents” in Appendix VIII of 40 C.F.R. Part 261 that would need to be considered in facility assessments and, where necessary, considered in any further investigation and cleanup through the corrective action. Second, EPA also proposed to clarify, by regulation, that emerging contaminants – including PFAS – can be addressed under RCRA’s Corrective Action Program. For more information about the proposed RCRA rules, see our previous update, available here.

What were some of the major developments in PFAS litigation?

Regulatory developments directly influenced litigation developments. While the regulated community pushed back, plaintiffs’ attorneys relied on the new regulations to identify new targets for litigation and prove the elements of their cases. Overall, the prior year signaled three major developments in PFAS litigation.

First, a variety of stakeholders pushed back at the Biden administration’s efforts to regulate PFAS. In American Water Works Association v. U.S. Environmental Protection Agency, No. 24-1188 (D.C. Cir. 2024), a coalition of industry and major water utilities challenged the EPA’s regulation of PFAS under the SDWA. They argue that the Agency set MCLs for six PFAS beyond what are technologically and economically feasible and, further, adopted an unprecedented “hazard index” approach to regulating two additional PFAS. And in Chamber of Commerce v. U.S. Environmental Protection Agency, No. 24-1193 (D.C. Cir. 2024), industry challenged the EPA’s designation of two PFAS as hazardous substances under CERCLA. Emphasizing that the Agency has never before invoked its statutory authority to directly designate hazardous substances under CERCLA, they argue that the Agency conducted an improper “substantial danger” analysis and failed to properly consider the costs and consequences of its regulation. Barring deregulatory action from the Trump administration, both cases are expected to be decided in 2025 and will have major implications for whether and how the EPA may regulate PFAS going forward.

Second, PFAS manufacturers cemented a significant victory when the U.S. Court of Appeals for the Sixth Circuit declined to revisit its opinion in Hardwick v. 3M Co., where it ruled that the district court erred by allowing a “class comprising every person residing in the State of Ohio” to bring claims against ten manufacturers of PFAS for allegedly contaminating their blood with PFAS. Hardwick v. 3M Co., No. 22-3765, at *2 (6th Cir. Nov. 27, 2023). Holding that the lead plaintiff lacked standing, the Court noted that he “does not know what companies manufactured the particular chemicals in his blood stream; nor does he know, or indeed have much idea, whether those chemicals might someday make him sick; nor, as a result of those chemicals, does he have any sickness or symptoms now.” Id. at *1. Given the ubiquity of PFAS in the environment, and the numerous potential sources of exposure, Hardwick’s legacy may be to raise the bar for standing, causation, and harm in cases alleging PFAS exposure.

And, third, enterprising plaintiffs’ attorneys avoided the standing issues raised in Hardwick by bringing false advertising claims against manufacturers of products alleged to contain PFAS. Relying frequently on state consumer protection laws, the plaintiffs in these cases allege that product manufacturers misled consumers and delivered products that are worth less than they would have been if the presence of PFAS had been disclosed. In one such case filed in late 2024, for instance, the plaintiff alleges that Samsung Electronics failed to disclose the presence of PFAS in bands used with its smart watches, thereby “causing [plaintiff] to overpay for Products” and “enjoy[ing] an unfair competitive advantage, receiving millions of dollars from consumers in ill-gotten proceeds while putting the health and welfare of millions of consumers and their families at risk ….” Class Action Complaint at ¶ 8, Gonzalez v. Samsung Electronics Am., Inc., No. 2:24-cv-11234 (C.D. Cal. filed Dec. 31, 2024). Expect these lawsuits to proliferate as government reporting obligations and third-party investigations lead to the discovery of PFAS in products where it was previously unknown to have been used.

What can happen to these rules and cases under the new administration? 

On the regulatory front, the Trump administration is expected to deregulate at the federal level and take a less active approach to PFAS than the Biden administration. One major tool that can be used to rescind regulations is the Congressional Review Act (CRA). The first Trump administration liberally used the CRA to rescind regulations issued in the final days of the then-outgoing Obama administration. A “lookback” provision in the CRA allows a new Congress to review and overturn regulations issued during the final sixty legislative days of the prior session – for purposes of the incoming Trump administration, the “lookback” period of the CRA is August 2024. The Biden administration intentionally finalized many regulations, including the PFAS MCLs and designation of PFOA and PFOS as hazardous substances under CERCLA, prior to August 2024 to stay out of reach of the CRA.

Though these PFAS-related regulations are out of reach of the CRA “lookback period” for rescinding regulations, there are other tools for doing so. EPA can amend or overturn a rule through ordinary notice and comment rulemaking under the Administrative Procedure Act. The notice-and-comment rulemaking requires that EPA develop a legal record justifying the proposed change and undergo a lengthy public notice process on the proposed regulatory/deregulatory action. Although it would be time-consuming, the EPA can use this option to amend or overturn the designation of PFOA and PFOS as hazardous substances under CERCLA as well as the PFAS MCLs. Of course, the future of these rules could also be determined by the ongoing litigation discussed above.

Another tool that already has been used by the new Trump administration to direct regulatory action in numerous substantive areas is the issuance of executive orders (EOs).  On the first day of his second term, President Trump signed several EOs affecting environmental policy established by the Biden administration, including an EO entitled “Initial Rescissions of Harmful Executive Orders and Actions,” which expressly rescinds a number of Biden administration EOs, including those addressing climate change and environmental justice. Proposed rules and guidance documents, such as the RCRA proposal discussed above, are now subject to President Trump’s EO entitled “Regulatory Freeze Pending Review” which requires that (1) no federal agency propose or issue any rule without review and approval of an agency head appointed or designated by President Trump, and (2) any rule submitted to the Federal Register that is not yet published must be withdrawn pending review. It is also possible that EOs will be issued to withdraw specific guidance documents inconsistent with the new administration’s goals and policies. For example, the EPA’s PFAS Strategic Roadmap could be shelved or rescinded.

These anticipated Trump administration regulatory actions could impact the trajectory of litigation challenging the Safe Drinking Water Act and CERCLA rules, especially if the EPA signals that it intends to withdraw or modify those actions. The private civil litigation, however, is expected to continue unabated.

As the new administration is expected to significantly alter the federal regulatory efforts to address PFAS across multiple program areas, potentially impacting both existing and yet-to-be-filed litigation, Babst Calland attorneys will track these developments and are available to assist you with these matters.  For more information on the federal regulatory and litigation developments discussed in this update or related matters, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Joseph Schaeffer at (412) 394-5499 or jschaeffer@babstcalland.com, Jessica Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com or any of our other environmental attorneys.  For additional resources and more information on other PFAS developments, please visit Babst Calland’s PFAS Perspectives page, here.

Key Legal Developments on Enforcement of the Corporate Transparency Act

Firm Alert

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

In recent weeks, significant developments have unfolded regarding the implementation of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements to the Financial Crimes Enforcement Network (FinCEN), which remain subject to a nationwide injunction.

As discussed in our previous Alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., temporarily halting enforcement of the CTA and its BOI reporting requirements, including the January 1, 2025, filing deadline. The U.S. Department of Justice (DOJ) appealed, requesting a stay of the injunction or, alternatively, a narrowing of the injunction to apply only to the named plaintiffs and members of the National Federation of Independent Business.

In a flurry of year-end decisions, a panel of the Fifth Circuit Court of Appeals granted DOJ’s emergency motion on December 23, 2024, lifting the injunction. Three days later, a separate Fifth Circuit panel reversed the earlier decision, vacating the stay and reinstating the nationwide injunction. As a result, FinCEN again updated its guidance, stating that reporting companies may voluntarily submit BOI filings but are not required to do so during the pendency of the injunction.

On December 31, 2024, DOJ filed an emergency “Application for a Stay of the Injunction” with the U.S. Supreme Court, seeking to stay the injunction pending the Fifth Circuit’s review of the matter. Alternatively, DOJ invited the Court to “treat this application as a petition for a writ of certiorari before judgment presenting the question whether the district court erred in entering preliminary relief on a universal basis.”

The ongoing legal challenges have left the status of the BOI reporting requirement in flux. For the time being, unless the Supreme Court intervenes, the nationwide injunction is likely to remain in place through at least March 25, 2025, the scheduled date for oral arguments before the Fifth Circuit. Businesses that have not yet complied with the reporting requirements should remain alert to any changes. If the injunction is lifted, or if the Supreme Court grants a stay, reporting companies may be required to submit their beneficial ownership information promptly, subject to any deadline extensions provided by FinCEN. In the meantime, voluntary submissions of BOI reports to FinCEN are still accepted, but companies should be prepared to meet any new deadlines should the situation change. The next few months could prove critical for the future of the CTA and its enforcement.

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland client relationship lawyer if you have any questions.