Colorado Privacy Act: New Protections for Consumers in the Centennial State

On July 1, 2023, the Colorado Privacy Act (CPA) will go into effect as the third state law generally governing consumer data privacy and was the second enacted in 2021.  If you do business with consumers in Colorado, regardless of your location, you should begin familiarizing yourself with the requirements of the CPA now.  While the CPA is similar to the California Privacy Rights Act (CRPA) and Virginia’s Consumer Data Privacy Act (VCDPA), certain elements distinguish the Colorado law from its counterparts.  Unlike the California law, the CPA does not apply to personal data in the employee or business-to-business relationship.  This client alert provides a breakdown of the general requirements and obligations on businesses and key distinctions with other state data privacy laws.

Covered Businesses and Applicability

Covered Controllers. The CPA applies to any business, called a “controller” under the statute, who “alone, or jointly with others, determines the purposes for and means of processing personal data,” and “conducts business in Colorado or produces or delivers commercial products or services that are intentionally targeted to residents of Colorado” and:

  • Controls or processes the personal data of 100,000 consumers or more during a calendar year; or
  • Derives revenue or receives a discount on the price of goods or services from the sale of personal data and processes or controls the personal data of 25,000 consumers or more.

There are a number of exemptions to the applicability provision that should be considered as part of the analysis of applicability.  First, the definition of consumers does not include “individual[s] acting in a commercial or employment context, as a job applicant, or as a beneficiary of someone acting in an employment context.” Second, the Act does not apply to certain types of personal data, as defined by the type of data, such as patient data, or as defined by the statute by which the collection and use of the data is regulated such as Gramm-Leach-Bliley.  Third, the Act does not apply to certain types of businesses, such as air carriers, public utilities (as defined by Colorado Law), or those subject to Gramm-Leach-Bliley. Notably, there is no revenue threshold requirement, meaning an applicability analysis begins by looking at the number of records processed.

Covered Individual.  To reiterate, the CPA does not apply to employee data, which, like the VCDPA means a consumer is a Colorado resident acting only in an individual or household context.

Personal Data. The CPA defines personal data as “information that is linked or reasonably linkable to an identified or identifiable individual,” but does not include “de-identified data or publicly available information,” including data “that a controller has a reasonable basis to believe the consumer has lawfully made available to the general public.”  This definition is similar to the VCDPA.

Controller and Processor Obligations

If the CPA is applicable to a controller then they, and their processors (a person that processes personal data on behalf of a controller) must adhere to a set of obligations.  The CPA sets out an analysis for determining whether a person is acting as a controller or a processor.

Obligations and Duties of Controllers

Under the Act, controllers must:

  • Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk;
  • Comply with the duty of transparency by providing notice of the sale of personal data and the ability to opt out and by providing “a reasonably accessible, clear, and meaningful privacy notice” that includes:
    • Categories of personal data collected/processed;
    • Purpose(s) of processing;
    • How consumers may exercise rights and appeal controller’s response to consumer’s request;
    • Categories of personal data shared; and
    • Categories of third parties personal data is shared with;
  • Respond to the consumer’s exercise of their rights;
  • Comply with the duty of purpose specification;
  • Comply with the duty of data minimization;
  • Comply with the duty to avoid secondary use;
  • Comply with the duty of care that is appropriate to the volume, scope, and nature of the personal data processed.
  • Comply with the duty to avoid unlawful discrimination;
  • Process sensitive data only with the consent of the consumer. Sensitive data is “(a) personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health condition or diagnosis, sex life or sexual orientation, or citizenship or citizenship status; (b) genetic or biometric data that may be processed for the purpose of uniquely identifying an individual; or (c) personal data from a known child;”
  • Perform data protection assessments before beginning processing activities that present a heightened risk of harm to a consumer – certain situations of targeted advertising or profiling, selling personal data, and processing sensitive data are activities that present a heightened risk of harm; and
  • Engage processors only under a written contract, which shall include the type of personal data processed and other requirements under the CPA.

Obligations of Processors

Under the Act, processors must:

  • Assist controllers in meeting their obligations under the CPA;
  • Adhere to instructions of controller and assist controller in meeting those obligations, including security of processing and data breach notification;
  • Ensure a duty of confidentiality for each person processing personal data; and
  • Engage subcontractors pursuant to a written contract and only after providing the controller an opportunity to object.

Rights of Consumers

Like the VCDPA and CPRA, the CPA includes a suite of rights which consumers may request with respect to their personal data:

  • Right of access;
  • Right to correction;
  • Right to delete;
  • Right to data portability;
  • Right to opt out, including specifically  of targeted advertising or the sale of personal data; and
  • Right to appeal, including the right to contact the attorney general if the appeal is denied.

Within forty-five days of receipt of a request, a controller must respond by (a) taking action on the request, (b) extending the time for taking action up to an additional forty-five days, or (c) by not taking action and providing the instructions for an appeal.  Information provided under a first request within a 12 month period must be at no charge to the consumer.  Controller’s may implement processes to authenticate the identity of consumers requesting rights.

Enforcement of the CPA

There is no private right of action under the CPA with enforcement authority delegated to both the Colorado attorney general and district attorneys.  The CPA doubles the cure period granted to controllers provided under the VCDPA and CPRA to 60 days; however, the entitlement to a cure period will sunset on January 1, 2025.  Under the CPA a violation is a deceptive trade practice under the Colorado Consumer Protection Act, such that while the CPA does not specify a penalty amount, the Colorado Consumer Protection Act specifies a penalty of up to $20,000 per violation.

What’s Next

If the CPA is the first data protection legislation applicable to your organization, the time to transition your team– IT, marketing, legal – is now.  Delays in implementation are likely and could be costly.

 

This article was written by Lucy Tyson, Brittney E. Justice and Matthew G. Nielson of Bracewell law firm. For more articles regarding privacy legislation, please click here.

Omicron COVID-19 Variant Prompts US To Suspend Travel From Eight African Countries

The Republic of South Africa informed the World Health Organization (WHO) of a new B.1.1.529 (Omicron) variant of SARS-CoV-2, in late November. That notice led the Biden Administration to announce the suspension of travel and restricted entry into the United States, which went into effect on Nov. 29, 2021.

At the moment, these travel restrictions appear to apply to individuals who were physically present – during the 14-day period preceding their entry or attempted entry into the United States – within the Republic of Botswana, the Kingdom of Eswatini, the Kingdom of Lesotho, the Republic of Malawi, the Republic of Mozambique, the Republic of Namibia, the Republic of South Africa, and the Republic of Zimbabwe.

These travel restrictions do not apply to the following:

  • U.S. citizens and their spouses
  • Lawful permanent residents and their spouses
  • U.S. military personnel, their spouses and children
  • Parents or guardians of unmarried U.S. citizens, lawful permanent residents, and U.S. military personnel under the age of twenty-one
  • Siblings of U.S. citizens, lawful permanent residents, and U.S. military personnel under the age of 21, all of whom must be unmarried and under 21 years of age

The Centers for Disease Control and Prevention (CDC) provided clarification for international travelers, regardless of their vaccination status:

  • For fully vaccinated individuals, a viral test must be conducted no more than three days (72 hours) before the flight’s departure from the designated foreign country along with proof of being fully vaccinated against COVID-19. Individuals should bear in mind that the testing period may be reduced to 24 or 48 hours before boarding and should check with their respective airlines prior to departure.
  • For individuals who are not fully vaccinated, a viral test must be conducted no more than one day (24 hours) before the flight’s departure from the designated foreign country. A quarantine requirement is also under consideration.

Consideration should be taken for limiting international travel at present, since circumstances and requirements are changing rapidly.

This article was written by Tejas Shah, Sarah J. Hawk, Michael E. Durham, M. Mercedes Badida-Tavas and Mandira Sethi of Barnes and Thornburg law firm. For more information regarding COVID travel bans, please click here.

Content Management & Technical SEO with John McDougall [PODCAST]

Skeptical of your marketing efforts and wonder if all that work is really worth it? Rachel and Jessica get some great background on SEO from John McDougall, President of McDougall Interactive. Spoiler alert: good SEO practices can catapult your business to the next level.

Read on below for a transcribed version of our conversation, created by AI. The transcript has been lightly edited for clarity and readability.

INTRO  00:02

Hello, and welcome to Legal News Reach, the official podcast for the National Law Review. Stay tuned for a discussion on the latest trends in legal marketing, SEO, law firm best practices and more.

Rachel  00:15

I’m Rachel, the Editorial Manager for the National Law Review.

Jessica  00:18

And I’m Jessica, a web content specialist for the National Law Review. And we’re the co-hosts for Legal News Reach.

Rachel  00:25

In this episode, we’re excited to talk to John McDougall, president of McDougall Interactive. John, would you like to introduce yourself to our listeners?

John McDougall  00:32

Yeah, sure. So welcome, everyone, and appreciate the opportunity to talk to you guys today. And I started in 95 at my father’s ad agency selling websites. So I kind of fell in love with it early on and have been doing SEO ever since. So now, I just started a class called Talk Marketing. In addition to the agency, McDougall Interactive, we do coaching and teaching.

Rachel  01:18

Excellent, we’re excited to get your perspective on SEO. So just sort of moving into our first topic here, with how much Google’s has changed, and how much people’s habits with, you know, searching tends to change, why is it so hard to do SEO now?

John McDougall  01:34

Oh, it’s just so much to do. I mean, it’s like you need a small army to do it, you need organizational skills, and early SEO, you could just fly around and go to some conferences and do some, you know, pull it off yourself. I don’t know, somewhere in the 90s, I made a hearing aid website over a weekend I did the logo, design, the website, built it and hand coded in HTML, wrote the pages for different brands of hearing aids, and launched it over the weekend. And then it was ranking and Yahoo, like number one for hearing aids, and then a company bought my client. And then I started working for that company. So it was that easy, almost back in the day. And now, I mean, my God, we’ll get into it more as we go here. But there are just 1000 different things that can influence your SEO.

Rachel  02:23

So moving more into legal industry specifics, is there a different approach for different types of law firms? So personal injury, or maybe more business-oriented law firms in terms of like website marketing?

John McDougall  02:37

I don’t have to sell a personal injury attorney on the idea of SEO, right, they’re there, they know that their customers are out there searching, you know, if you get bit by a dog or injured by a dangerous drug or medical device, you don’t necessarily even want to ask someone for a referral, if it’s embarrassing. Or if you’re in a rush, or you know, whatever it is. So you’re going to search Google, it’s a no brainer. On the other side, with business lawyers, there are some very big companies that, you know, business attorneys will say they’re just not going to search Google for me. And that may be true, but later they tell you, but if they do search for this certain niche kind of thing, I’d like my thought leadership content to be there at the top of Google. So ironically, I think that sometimes having good content that search optimized is maybe not as important as the obvious thing with personal injury, like I said, but pretty close to similar importance, right? So if it’s intellectual property, or international law, different things that are really important, if you’re going to impress the General Counsel, or some really high level people, they might want to see that you’re in search, not just in conversations with them and, and even if it’s not so much, they’re searching Google, when they get to your site, there should be an active, either a blog on your site, or separate off site blogs on niche topics that really just show highlight your thought leadership. So my argument would be if you if you have to do that anyway, because you want to show your thought leadership, at least put some effort into a fast loading website, good title and meta tags, consistent content, if weekly, if not, at least monthly. So some of the same things that you would tell a personal injury lawyer really do apply to business lawyers just at a slightly less exaggerated pace. You might not go out and do link building or like you probably will do PR but maybe not PR for link building like you would with personal injury potentially. A lot of spreading your thought leadership content should involve good quality content that is optimized for the internet. You know that a lot of that is his research some of its or social media. But, you know, so a lot of the same rules apply at different levels of exaggeration,

Rachel  05:10

Right. And so once lawyers really get their feet into creating this really great content and optimizing SEO, how do they then keep up with all the changes that Google makes to its algorithm?

John McDougall  05:23

They have to either hire an agency who keeps up with it, or to help them and spoon feed what’s most important to them? That would be one way. The other way, if they’re going to be more do it yourselfers or the marketing department wants to keep up. I just have to keep reading things like search engine land Search Engine Journal, you know, HubSpot blog, things like that, you’re going to really need to keep up. And an agency has the benefit of testing across lots of sites. So for as an example, in 2012, I had 27 clients or something like that. And Google Penguin hit, which was an algorithm, Google designed to discredit low quality links. One day, I was looking at my ranks, and I said, Geez, this doesn’t look good. Something’s going on here. And I asked a guy that was a subcontractor of mine, he said, No, I’m not seeing anything unusual. He’s like, wait a minute, let me call you back. He goes and looks at his rankings across, he had hundreds of clients, he had a lower price point and the strategy of more clients, and he said, Oh, crap, we’re seeing like, significant drops consistently across all clients, it turned out that Google had just dropped the bomb of Google Penguin on people. And I think, later, they maybe regretted it, I’d like to think that they went too fast with it. So, you know, by having multiple clients, and asking a subcontractor to read lots of clients, we were able to see that this is not a made up trend. This is not my imagination, you know, this is how we’re keeping up with trends is networking with peers. And then of course, it broke within hours or days on search engine, journal, and Search Engine Land and things. But we were we were seeing it in multiple clients’ data. So if you’re a law firm, you have one site, just be aware of that, that, you know, you should be looking to others that have multiple clients are certainly at least the top, you know, SEO media magazine sites online, and you so that you can see what the trends are.

John McDougall  07:35

I think an editorial calendar is key. At the National Law Review, you have huge amounts of content, but you need to think like a magazine/ And if you don’t, you won’t be consistent. So that’s at the heart of it. And then find ways to either the attorneys involved, or the agency involved with the attorneys to generate content around topics. And we can get into that more in a minute.

Jessica  08:13

We were going to ask you about each social media type, mostly because so many law firms now are realizing if they didn’t before, which they probably didn’t. But I think law firms and clients in general are realizing we can make the internet and like social media work for us. And they’re paying attention to what those numbers mean now. So I want to know, you know, I want to tack each type that we’re seeing more common output with so like podcasts. How does that help with SEO?

John McDougall  08:42

Yeah. And so I would tie that again, back into the last question, because I think it’s critical that people understand that you can do s SEO driven content through podcasting, and video, if you’re not using transcripts, for your podcasts in your videos, you just probably not getting as much mileage as you could. And a lot of people will make like a show note for your podcast. And that’s good, you know, a little couple paragraphs or something in this episode, you’ll see this in some bullet points. But in addition to that, having the transcript as an option, you can even make it so it can disappear and appear on the page. So the search engines can still read it. But having content with attorneys that are thought leaders isn’t always easy to get with having them write, you know, some of them are going to be rock stars they’re going to write, some of them just aren’t. And you might have categories that well, the intellectual property lawyer is writing just fine. But the international law or whatever law is the person’s amazing speaker but a terrible writer are just lazy or just doesn’t have time to write whatever it is. If you want SEO and consistent content, you can just do shorter ones, because every minute of podcasting, we get 130 words, even a 10 minute, say 12 minute podcast, you can get like 1500 words, that’s a really robust, deep piece of content. And the attorneys just talking, you know, they do that all the time, they’re good at it. So if your marketing team handles that, and just knocks those out to be consistent, you got to let go a little bit. And maybe occasionally do the half hour, the hour podcast, you’re gonna get a lot of consistent content, then you can turn some of that into short YouTube videos, or do remote YouTube videos, or in person YouTube videos that are like a minute, two minutes, you know, what is this particular law? You know, What is Brexit, even, you know, cover some of the things that if you’re a search engine algorithm, it’s going to be good to see on your website that you dispute, you know, ask the question, like, What is Brexit? Maybe somebody on their into Amazon Alexa, or Google Home is like, hey, Alexa, What is Brexit? So if you’re going to cover all of the gamuts of the way people are asking questions, you’re going to need lots of content. And if you’re waiting around for, you know, attorneys to write that aren’t necessarily writers. Sometimes it works great.

Jessica  12:12

It’s really interesting that you mentioned podcasting and combining video with that, because that’s what we are doing. But it’s also like having the transcript for a podcast episode is the web content accessibility guideline that you’re supposed to have on a website, you’re usually supposed to have to be ADA compliant. Yeah. So it’s it to know it helps SEO is always good. So I’m sure would tell people listening to this, that, hey, that extra work actually does help you and you know, the people who need to access your site.

John McDougall  12:45

Yeah. So exactly like all this just for SEO, it’s a big pain in the butt. All of your content should have an alternative version, even an image should have as you hover over it an alt tag. And that was true in the 90s, and I think it’s part of the future of SEO and it’s been there and you really can’t ignore it anymore.

Jessica  13:55

I think the pandemic especially made that very loud realization for so many people, not just the compliance part of a website, also, just with this SEO, all these numbers and tactics you have to use now on your site, because that’s where people are going. I mean, when the pandemic happened, you weren’t going into a place you were going to their site. So how has SEO changed? Besides like those couple of things? Are there any other characteristics you’ve noticed since the past year? So

John McDougall  14:25

I’d say the competition level is huge because of the pandemic. My father who had the ad agency, sent me an article six months or a year ago, the Wall Street Journal said that essentially the Mad Men era is done, exacerbated by  SEO and Google ads. More and more important, I think podcast ads have taken over more than radio ads after the pandemic. It’s like the nail in the coffin. Now, most of advertising is controlled by the big Google, Facebook, Amazon for products, right? Because Amazon’s basically a search engine for the products. So those three alone, I mean, Google’s top five company and, you know, the old control that ad agencies had is basically gone. The Wall Street Journal saying basically, advertising is controlled by digital now. And what does that mean? That means there’s a crazy amount of competition. So if you’re doing SEO, like I was a long time ago, the hearing aids just cram it into the title and meta tags. And throughout the page, you’re done. You know, that’s not the case anymore. Now, type in something like Phone X, hearing aids or series, Siemens hearing aids online or something, and then see the page that ranks what is there, and it’s probably, you know, God knows how many SEO agencies have helped hearing aid companies make like the ultimate page, the ultimate guide to hearing aids, you know, this, like 10,000 word article? That’s, that’s a big change. And, you know, we can go in more into some of the specifics. But that’s more broadly, what I think is changed as competition is up, and it’s not going away anytime soon. I mean, what are you guys seeing with SEO? Overall? Are you seeing big changes? Or it’s harder than ever? What are you seeing?

Rachel  16:43

I would say, probably one of the biggest things that we’ve seen make an impact in terms of like our clients content, when we see things do particularly well, it’s that they have, you know, really great keywords. So, you know, headers posed as questions, the articles are long, so they have like about 1200 words. Timeliness also seems to be a big contributing factor to content success. So if it comes to us, you know, around noon, rather than like, 5pm, on a Friday, those articles tend to do way better than ones that are short, you know, that don’t have like, you know, really great bullet points, really great formatting. I think in terms of people who are looking to sort of do well on our website, and things like that, it’s important to make your content really great for search engines. So you know, and also really readable for people. Yeah, so having really great headers, you know, thinking about what people who want to find your expertise, like what are they want to know about, and including that in your headers and things like that.

Jessica  17:53

Definitely, that content competition is huge. Now, I mean, we already get a lot of content just because we have so many clients that we want to, you know, put out their information. You know, if we have a Supreme Court decision, that’s huge. I mean, we’ll get like multiple pieces on the same thing. And it’s kind of a game of like, who the slightest difference in formatting or word choices, keyword choices can really like make some articles do really well, as far as viewership just staying on the page and not bouncing versus other pages that for some reason, even on the same topic, maybe you just didn’t quite do the same level, you know, not as many views.

John McDougall  18:32

Historically, SEO people like myself will be more focused on the backlinks than on the social shares. Sometimes one helps the other. So one of my best case studies, we wrote an article for a bank, and it got on to NerdWallet. NerdWallet interviewed us to link to the content. But it was all started with just sharing it on Twitter and Facebook. So we were we were sharing the content. We were doing social media, but we weren’t holding our breath for to do that much except hoping we would get some people to link to the content. And we got backlinks from NerdWallet, which is like a massive financial website with a huge amount of credibility. Another one was lobsters, we ranked number two in Google for the single word lobsters. And I wrote an article because I have lobster traps and do fishing and things. And so I wrote an article 100 Fun Facts About lobsters and it got shared by the Huffington Post and a bunch of places no, suddenly, this little restaurant near me got hundreds of 1000s of views on a, you know, a silly page about lobsters with some historic photos and, you know, these crazy facts. Sometimes we’ll use social media to get links, you know, just getting the visibility out there and I agree that you know, if you can get it out there faster, you’re more likely to get all that to happen.  And you can look at your top pages and look by top pages by social shares and top pages by backlinks. So I would just recommend to the audience and you guys, if you’re not doing it, check out where you rank in search. Are you like number four, or five, or God forbid, number six, because Top Five is where I forget, it’s like 67% of the eyeballs go, used to be want to be top 10 In Google. Now, really, top five is key. And a number one, of course, gets, you know, a huge amount of the lion’s share of eyeballs and clicks, you get a lot of leads, do you think from social media? Or is that part of the process?

Rachel  20:53

The vast majority of our traffic does come from SEO and from Google. But we definitely see a connection between the social outreach that we do we have a pretty robust social media strategy and process where we try to, you know, use certain hashtags that are relevant, and also tagging specific people who we think would find the content to be specifically interesting to them. Social is definitely a big part of it. But it’s sort of like the larger picture of it’s just one of the things that we do, I think SEO is more important, but I think social kind of can tie in SEO in a way that the relevant people are finding it on a different channel

John McDougall  21:32

One of the things I speak to and I’ve done this with Jennifer, actually on a webinar is the seven main factors of SEO that I believe people need to think about, like technical SEO, which is a really a booming trend right now, a fast loading website is going to rank way better than a slow loading website. Because even if you do everything right, SEO wise, if it’s slow loading, Google is not going to give you as good a ranking. Number one is technical SEO – you can’t have too many broken links, no duplicate titles, and meta descriptions all over the place. And it’s not like it used to be, but it’s still on page SEO, and then content, fresh content, blogging, content, depth of content is important. And then off page SEO, or what we call link building, which is essentially PR. You need to get media sites or even small blogs, to link to you and link to individual pages. And then number four is user signals, and user experience. And then user signals are more like if you search Google for, you know, personal injury lawyer Boston. Seven is branding. So instead of just doing SEO, law firms should really be building a brand that’s known for something. And you guys are known in at least if you look at your backlinks and your social shares, again, Brexit, I think it was constitutional amendments, you guys get a lot of backlinks for that. So build your brand and be known for something and then have some content that you really stand out for. That is more the future of SEO is you can’t just do SEO, ironically, you need to be part of a brand.

Jessica  24:08

The purpose of SEO and those tactics are good for people, because I think it makes the content more relevant. I think it makes things on the internet more valuable to people who need it. You know, everybody goes on the internet for information now. And now companies and websites are forced to make sure that they’re actually valuable. They’re not just filled with links for no reason and, you know, short little things that aren’t going to help someone so I think yeah, I don’t know if everybody agrees with that. But I think it actually makes it better for the audience that’s reading it and going to your site anyway. Personally, I think it’s good

John McDougall  24:42

 Google is better at enforcing those things now. So that was sort of the goal always with the Internet. But because we could just game the system, you know, certainly low end SEO companies back in the day, just get crappy links build stupid pages that meant nothing. Those tactics should be dead. Unfortunately, it’s like, wow, no, it’s so hard. Like you didn’t have to go that far. Take some of those TV dollars or, or print dollars or event dollars. And actually, whether you pay agencies or do it internally, really train up and do it right. There’s a lot of proven workflows for this stuff. You just have to trust the three of us and other people doing this stuff, are people we’re not just making stuff up, you know, where we’re doing all those things we just discussed, and it takes time, each one of them. Add snippets to the site, you know, go into figure out Google Analytics for you know, use Google Search Console every week, you know, use SEMRush to use a draft. All this stuff is more time consuming now, but I like it. I think it’s more developed. It’s, you know, you have to be more aggressive. It’s not as easy. I mean, there’s certainly a lot to do. So. That’s the good news is, there’s stuff to do that does work if you keep at it. But yeah, if you’re not consistent, it’s never going to work. You get those social shares and even sometimes backlinks from very relevant partners or related people and Google can’t miss that, you know. So yeah, it’s all a win win. Yeah, I could go off way off on that one. But sounds like you guys are really doing the right thing with it and repurposing that content.

Rachel  26:32

Yeah. It’s been a lot of fun. And we’ve had a great conversation with you, John, thank you so much for joining us.

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Same As It Ever Was: FDA Reiterates That CBD Cannot Be Included in Food or Dietary Supplements

While we enter a new season this week, the same cannot be said for the FDA which, on November 16, reiterated that its approach to regulating the cannabidiol (CBD) industry will be “the same as it ever was”—a regulatory minefield. Grail Sipes, acting Deputy Center Director for Regulatory Policy at the FDA’s Center for Drug Evaluation and Research, emphasized the agency’s position that it needs additional CBD research and safety data before the agency will consider CBD for uses beyond prescription drugs, including usage as a food additive or dietary supplement. This, she said, is because “clear answers to many important questions are still lacking, such as what adverse reactions may be associated with CBD from hemp-derived products and what risks are associated with the long term use of these products.”

So why should industry stakeholders care about the FDA’s opinion anyway? Wasn’t hemp-derived CBD legalized at the federal level by the Agriculture Improvement Act of 2018, also known as the Farm Bill?

Yes, but as we discussed in a previous blog post, the FDA and FTC have overlapping enforcement authority over CBD marketing, with the FDA having primary authority over labeling. The FDA has previously issued guidance stating that CBD can be used as an ingredient in cosmetics so long as it does not cause the product to be “adulterated or misbranded.” However, a product containing CBD cannot be marketed as a drug absent FDA approval—a lengthy and costly process. Companies marketing CBD products must therefore ensure compliance with the FDA’s labeling requirements and guidance regarding CBD products.

The FDA has not been shy to issue warning letters to CBD companies that fail to heed the agency’s labeling requirements and guidance. Starting in April 2019, the FDA (together with the FTC) began issuing warning letters to companies marketing CBD products as treatments and cures for a variety of diseases and illnesses. Those agencies continued to issue warning letters for marketing and labeling violations throughout 2019, largely for improper health-based claims about CBD products (those letters are described in more detail here and here). The most recent iteration came in 2021 when the agencies issued two warning letters to companies selling over-the-counter (OTC) drugs for pain relief that contained CBD. Sipes made clear the FDA will continue to monitor the CBD marketplace and issue warning letters to companies making improper health claims in her November 16 comments.

Given these comments, we can expect the cat-and-mouse game between federal regulators and CBD companies that push the marketing envelope to continue. To mitigate the risk of falling within the FDA’s crosshairs, CBD companies must ensure compliance with the various state and federal regulations governing the labeling and advertising of their products. We provided several marketing dos and don’ts in a previous blog post. But given the FDA’s unchanging position, the biggest takeaway remains the same: don’t make claims that a CBD product “can prevent, treat, or cure” or a disease.

Article By Rachel L. Sodée and J. Hunter Robinson of Bradley Arant Boult Cummings LLP

For more news on biotech, food, and drug law, click here to visit the National Law Review.

© 2021 Bradley Arant Boult Cummings LLP

Just When I Thought I Was Out: Omicron Variant and the Return of Regional COVID-19 Travel Bans

Following its November 8, 2021 move to remove and replace all regional COVID-19 Travel bans with a blanket vaccination requirement, the Biden administration announced a new COVID-19 travel ban on those seeking to enter the U.S. from various African nations.  The new Proclamation bars most non-U.S. citizens who have been physically present in the following countries during the 14-day period prior to attempting to enter the United States:

  • Republic of Botswana

  • The Kingdom of Eswatini (formerly Swaziland)

  • The Kingdom of Lesotho

  • The Republic of Malawi

  • The Republic of Mozambique

  • The Republic of Namibia

  • The Republic of South Africa

  • The Republic of Zimbabwe

Who is covered?

The Proclamation includes several important qualifiers and exemptions. It only applies to “noncitizens” of the United States, but it includes both immigrants (those coming to stay indefinitely) and nonimmigrants (those coming temporarily).

The Proclamation bars entry for noncitizens who have been physically present in the listed countries during the 14 days prior to attempting to enter the U.S., not because of their citizenship. In other words, a South African coming to the U.S. directly from South Africa is barred, but a South African coming directly to the U.S. after 14+ days in Australia is free to enter. Importantly, the Proclamation applies in addition to the blanket vaccination requirement, so anyone seeking an exemption from the new Proclamation must also either be properly vaccinated or qualify under the extremely limited exceptions to the Vaccination requirement.

The new Proclamation does not apply to the following classes:

  • Lawful permanent residents (aka green card holders). The Proclamation does apply to immigrants, meaning it would bar those seeking to enter on immigrant visas to become lawful permanent residents.

  • The spouse of a U.S. citizen or lawful permanent resident.

  • The parent or legal guardian of a U.S. citizen or lawful permanent resident, as long as the U.S. citizen or lawful permanent resident is unmarried and under 21.

  • The sibling of a U.S. citizen or lawful permanent resident as long as both are unmarried and under 21.

  • Noncitizen nationals of the United States.

  • The children, foster children, or wards of a U.S. citizen or lawful permanent resident and certain prospective adoptees.

  • Those invited by the U.S. government to fight the Corona virus.

  • Those traveling on certain crewman and transit nonimmigrant visas.

  • Nonimmigrants in most diplomatic statuses.

  • U.S. Armed Forces members and their spouses and children.

  • Those whose entry would not pose a “significant risk” of spreading the virus as determined by HHS and CDC.

  • Those whose entry would “further important law enforcement objectives” as determined by named agencies.

  • Those whose entry would be in the U.S. national interest, as determined by named agencies. National interest exception (NIE) procedures are still unclear and should be addressed in the near future, including whether prior NIE approvals will be honored.

In addition, the new Proclamation should not affect any applicant for asylum and other related humanitarian relief such as Withholding of Removal or protections under the Convention Against Torture.

How Long Will it Last and are More Travel Bans Coming?

The Proclamation’s ban began on November 29, 2021 and will remain until terminated by the President. On-the-ground case numbers in each country will determine the White House’s willingness to lift travel restrictions, but an increase in numbers in other countries could see an expansion and return to regional travel bans.

The duration of the new Proclamation and its potential expansion to other countries will likely depend on the effectiveness of vaccines against the Omicron variant and any new variants that arise in the coming months. If existing or newly created vaccines are able to combat new variants, the White House will likely rely on its blanket vaccination requirement and not fall back to the Trump-era country-specific regional bans.

© Copyright 2021 Squire Patton Boggs (US) LLP
For more COVID-19 travel updates, visit the NLR Coronavirus News section.

11 Ways to Tap into the Legal Market’s Greenfield

A survey conducted in 2019 determined that nearly 80% of Americans with a legal issue didn’t hire a lawyer to handle it. When you consider that over 50% of people in the US claim to have had a legal issue at some point over the last two years, you’re looking at a considerable amount of potential clients. In other words, there is an enormous array of people who need lawyers who simply aren’t hiring one.

The secret to tapping into this greenfield dormant legal market is knowing the reasons behind their aversion to lawyers. By understanding the reasons behind people’s hesitancy to pay for legal services, you can attempt to better appeal to them, and tap into a huge pool of potential clients.

Why People Are Hesitant To Hire Lawyers:

!Price

The first and most obvious reason why people are hesitant to hire a lawyer is the price tag attached to them. Considering the majority of Americans are living paycheck to paycheck, it’s not surprising that paying between $100 and $400 an hour for a lawyer (or more) is a stretch for their wallets.

Even “simple” legal cases can cost thousands of dollars, and more complex ones can be financially detrimental for a cash-strapped client. Although many lawyers are starting to move towards a flat-fee pricing system that delivers an upfront summary of costs rather than wondering how much your case will all add up, a lot of people still aren’t biting.

It’s time for lawyers to start asking themselves how they can transform the way they deliver and price their legal services to tap into this untapped world of would-be clients.

!Lack of Transparency

Ever heard the joke, “what’s the difference between a vacuum cleaner and a lawyer riding a motorcycle?” — “The vacuum cleaner has the dirtbag on the inside.” This is just one of the many zingers out there about lawyers. It’s no secret that many swindling lawyers have made it hard for the honest ones in the profession. Now, lawyers have to defend themselves against lousy reputations for lack of transparency about their prices.

That’s why it’s incredibly important that you lay out your pricing system from day one. Be clear about your prices, and you’ll save you and your client a world of trouble later on.

!Bad Past Experiences

Another frequent reason for the untapped legal market not hiring lawyers is because many people have had bad experiences with a lawyer in the past. Surprisingly, people’s biggest reason for a negative experience is often because they felt their lawyers were very bad at communication. Believe it or not, a positive client experience doesn’t always come down to their lawyer winning their case or not. Clients often just want to be informed on their case and answered in a timely manner when they have a question.

That means there are people out there thrilled with their lawyers and their lawyers didn’t even give them the best possible outcome on their case. Ultimately, what people want is a positive client journey. Yet, without a systematic method in place, it can be hard to deliver the kind of service that people want.

The only way to convince people that not all lawyers are bad is to get things started on the right foot. Using legal client intake software is the only way to respond quickly when you’re handling multiple cases at a time. Workflow automation for law firms makes your clients feel connected to you from the first moment they reach out. Legal client intake software allows you to set up trigger-based emails that automatically send a message out based on an action of your choosing. The end result is satisfied clients who feel as if they’re your only client.

©2021 — Lawmatics
Article by Sarah Bottorff with Lawmatics.
For more articles about the legal market, visit the NLR Business of Law section.

Senate Bill Would Amend FIFRA to Prohibit Dangerous Pesticides and Cancel Registrations of Organophosphates, Neonicotinoids, and Paraquat

On November 23, 2021, Senator Cory Booker (D-NJ) announced his intention to reintroduce the Protect America’s Children from Toxic Pesticides Act of 2021, that would amend the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) “to [protect fully] the safety of children and the environment, to remove dangerous pesticides from use, and for other purposes.” Similar legislation was introduced in the House (H.R. 7940) and Senate (S. 4406) in 2020, but the bills did not move out of committee.

Ending Indefinite Delays on Review of Dangerous Pesticides

The bill would amend FIFRA Section 2 to add a provision regarding registration review determination, defined as “the final decision to renew the registration of a pesticide product or active ingredient to authorize the use of the pesticide product or active ingredient” for an additional 15-year period from the date of the previous registration, reregistration, or registration review determination and in compliance with all applicable laws and regulations. Registration review determinations would not include any intermediate determination regarding the continued use of pesticide product or active ingredient.

The bill would allow an interested person to petition the U.S. Environmental Protection Agency (EPA) to designate an active ingredient or pesticide product as a dangerous pesticide, which would be defined as an active ingredient or pesticide product that may:

  • Be carcinogenic;
  • Be acutely toxic;
  • Be an endocrine disruptor;
  • Cause harm to a pregnant woman or a fetus; or
  • Cause neurological or developmental harm.

EPA would have 90 days after receiving the petition to make a finding as to whether the petition presents substantial scientific information indicating that the designation of the petitioned active ingredient or pesticide product as a dangerous pesticide may be warranted. If EPA fails to make a finding, the active ingredient or pesticide product would be deemed to be a dangerous pesticide. In making its finding, EPA “shall fully consider all relevant evidence,” including epidemiological studies or data; peer-reviewed literature; and data generated by a federal or state agency or an agency of a foreign government.

If EPA issues a finding that an active ingredient or pesticide product may warrant designation as a dangerous pesticide, the registration would be suspended immediately and remain suspended until EPA makes a registration review determination. The continued sale and use of existing stocks of a suspended active ingredient or pesticide product would be prohibited. If EPA fails to suspend the registration of an active ingredient or pesticide product that may warrant designation as a dangerous pesticide by no later than 60 days after any deadline described in this subsection, the registration of the active ingredient or pesticide product would be “immediately and permanently canceled” and the sale of existing stocks would be prohibited.

Emergency Review of Other Pesticides Banned in Other Nations

The bill would amend FIFRA Section 6 to require EPA to suspend immediately the registration of any active ingredient or pesticide product that is banned or otherwise prohibited from entering the market by the European Union (EU), one or more EU member states, or Canada. EPA would then complete an expedited review of the justification and rationale for the ban. Unless EPA determines that the decision was “clearly erroneous,” the suspended registration would be canceled not later than two years after the date of completion of the review. EPA “shall fully consider all relevant evidence,” including epidemiological studies or data; peer-reviewed literature; and data generated by a federal or state agency or an agency of a foreign government. In determining whether the ban was “clearly erroneous,” EPA would be prohibited from considering “any economic analysis of the benefits or costs of continuing to register the pesticide.” Before making a final determination, EPA would provide the draft determination for a comment period of not less than 90 days.

Ensuring Accountability in Conditional Registrations

The bill would amend FIFRA Section 3(c)(7) to provide registrants only two years to meet the terms and requirements of conditional registration. If a registrant fails to comply with the conditions by the earlier of the deadlines established by EPA or two years after the effective date of the conditional registration, EPA would cancel the conditional registration. Conditional registrations outstanding at the time the bill is enacted for which the registrant has not met the conditions would be canceled. The continued sale and use of existing stocks of a pesticide for which the conditional registration has been canceled would be prohibited.

Prohibition on the Sale or Use of Existing Stocks of Suspended or Canceled Pesticides

The bill would amend FIFRA Section 6(a) to prohibit the sale or use of existing stocks of a pesticide for which the registration is suspended or canceled, or vacated or set aside by judicial decree.

Amending Emergency Exemption Provisions

The bill would amend FIFRA Section 18 to limit emergency exemptions for the same active ingredient or pesticide product in the same location to two years in any ten-year period. EPA would no longer grant emergency exemptions to use an active ingredient or pesticide product that is not registered for any use or that is registered conditionally.

Adding Transparency for Inert Ingredients

The bill would amend FIFRA Section 2(n) to require that the ingredient statement include:

  • The name and percentage of each active ingredient in the pesticide product;
  • The name and percentage of each inert ingredient in the pesticide product;
  • If applicable, a statement that the pesticide product contains an inert ingredient determined by a state or federal agency, or the Administrator based on epidemiological data or peer-reviewed literature, to be likely:
    • To be carcinogenic;
    • To be an endocrine disruptor;
    • To be acutely toxic;
    • To cause harm to pregnant women or fetuses; or
    • To cause neurological or developmental harm.

The bill would amend FIFRA Section 3(c)(9) so that any required label or labeling must provide a complete list of inert ingredients.

Cancellation of Registration of Organophosphates

On the date of enactment, the bill would deem all organophosphate pesticides “to generally cause unreasonable adverse effects to humans,” and the registration of all uses of organophosphate pesticides would be “immediately and permanently canceled by operation of law and without further proceedings.” Tolerances and exemptions that allow the presence of an organophosphate or any pesticide chemical residue that results from organophosphate use in or on food would be revoked within six months of the date of enactment. The continued sale or use of existing stocks of organophosphate pesticides would be prohibited on the date of enactment. The bill would not allow any future organophosphate registrations and organophosphate pesticides would be ineligible for emergency use.

Cancellation of Registration of Neonicotinoids

On the date of enactment, the bill would deem all active ingredients and pesticide products containing one or more of the active ingredients imidacloprid, clothianidin, thiamethoxam, dinotefuran, acetamiprid, sulfoxaflor, and flupyradifurone (neonicotinoid pesticides) “to generally cause unreasonable adverse effects to the environment,” and the registration of all uses of neonicotinoid pesticides would be “immediately and permanently canceled by operation of law and without further proceedings.” Tolerances and exemptions that allow the presence of a neonicotinoid pesticide or any pesticide chemical residue that results from neonicotinoid pesticide use in or on food would be revoked within six months of the date of enactment. The continued sale or use of existing stocks of neonicotinoid pesticides would be prohibited on the date of enactment. The bill would not allow any future neonicotinoid registrations and neonicotinoid pesticides would be ineligible for emergency use.

Cancellation of Registration of Paraquat

On the date of enactment, the bill would deem paraquat “to generally cause unreasonable adverse effects to humans,” and the registration of all uses of paraquat would be “immediately and permanently canceled by operation of law and without further proceedings.” Tolerances and exemptions that allow the presence of paraquat or any pesticide chemical residue that results from paraquat use in or on food would be revoked within six months of the date of enactment. The continued sale or use of existing stocks of paraquat would be prohibited on the date of enactment. The bill would not allow any future paraquat registrations and paraquat would be ineligible for emergency use.

Empowering Communities to Protect Themselves from Pesticides

The bill would amend FIFRA Section 24 to extend the authority of a state to regulate the sale or use of any federally registered pesticide or device to “any political subdivision of a State.”

Protecting Farmworkers from Dangerous Pesticides

The bill would amend FIFRA Section 3(c)(9) to require that labels be printed in both English and Spanish. If a pesticide product is known to be used in agriculture by more than 500 individual persons or applicators who speak the same language other than English or Spanish, EPA will provide a translation of the label in that language on its website. The bill would amend FIFRA to include a section concerning farmworker safety. Employers of farmworkers would be required to report to EPA farmworker incidents, defined as exposure of a farmworker to an active ingredient, a pesticide product, a tank mixture of multiple pesticides, a metabolite, or a degradate that results in:

  • An illness or injury:
    • Requiring medical attention or hospitalization of the farmworker; or
    • That requires the farmworker to stop working temporarily or permanently;
  • A permanent disability or loss in function of the farmworker; or
  • Death of the farmworker.

The bill would require EPA to implement an online system to facilitate the reporting of farmworker incidents within 60 days of the bill’s enactment. The online system must allow for anonymous reporting to protect farmworkers from retaliation. Employers that fail to report a farmworker incident would be fined $1,000 per day beginning on the eighth day after the farmworker incident occurs. Employers that knowingly fail to report or that pressure or coerce a farmworker not to report would be liable for a criminal penalty of up to $100,000, six months in prison, or both. The bill calls for EPA to implement a reward system that provides a monetary award of not less than $25,000 per person per farmworker incident that leads to the identification of one or more employers that have failed to report a farmworker incident.

Within 15 days of receiving a report of a farmworker incident, EPA would transmit a report of the incident to the manufacturer of each involved pesticide product and the manufacturer of each involved active ingredient or ingredients. If a farmworker incident results in the death of a farmworker, the pesticide product or active ingredient that caused the death would be immediately suspended, pending a review. Pesticide product manufacturers who receive a farmworker incident report would have 60 days to provide EPA an assessment of the incident, including whether any changes to the label of the pesticide product or active ingredient are warranted at the time of the assessment to avoid future farmworker incidents. Active ingredient manufacturers who receive a report of a farmworker incident would have 60 days to provide to EPA an assessment of the farmworker incident, including whether any changes to the pesticide product or active ingredient are warranted at the time of the assessment to avoid future farmworker incidents.

No later than the earlier of 90 days after receiving an assessment from a pesticide product or active ingredient manufacturer or 180 days after the occurrence of the farmworker incident, EPA will make a draft determination as to whether a change in the label of an involved pesticide product is warranted. EPA will publish its draft determination in the Federal Register for a 30-day comment period. No later than 30 days after the close of the public comment period, EPA will make a final determination as to whether the label should be changed and publish its decision in the Federal Register.

If EPA makes a final determination that the label of the applicable product must be changed and the manufacturer of the pesticide product or active ingredient fails to do so, the pesticide product or active ingredient “shall be immediately and permanently canceled by operation of law and without further proceedings.” If a pesticide product or active ingredient is responsible for ten or more farmworker incidents of any type, or three or more incidents resulting in death, and the pesticide product or active ingredient has not received a final determination regarding a registration review during the preceding 15-year period, EPA will “immediately suspend the pesticide product or active ingredient until a final determination is made regarding the registration review of the pesticide.”

Authority to Bring Civil Action

The bill would amend FIFRA Section 16 to allow any person to bring a civil action where there is an alleged failure of EPA to comply with any of its provisions. The U.S. District Courts would have exclusive jurisdiction over such actions.

Employee Protection

The bill would amend FIFRA to add a section regarding employee protection. Employers would be prohibited from discharging or discriminating against an employee because the employee has commenced or is about to commence a proceeding under the Act, has testified in a proceeding, or has assisted or participated in a proceeding. Employees would have 30 days from the date of the alleged violation to file a complaint with the Secretary of Labor and the Secretary would have 30 days to conduct an investigation.

Commentary

This bill is unlikely to become law any time soon. This legislation, or anything like it in terms of its presumption that pesticides approved by EPA under current law are fundamentally flawed, would present a radical change to current EPA authority and procedures. Advocates of such change believe otherwise, and point to the fact that FIFRA has not been amended for 25 years. Whether this is sufficient to garner broad support of national environmental and consumer advocacy groups is unclear. Assuming it gains the support of at least a handful of Democrats in the Senate, along with a likely House companion bill, this legislation lays the groundwork for advocating eventual changes to FIFRA. This approach takes a page from the Toxic Substances Control Act (TSCA) reform playbook. Certain Members of Congress and TSCA stakeholders established policy positions for reform five or more years before reauthorization occurred. Similar to TSCA, the legislation is premised on the view that FIFRA is fundamentally flawed, a widely held view with TSCA reform. This view is not widely shared with regard to FIFRA, however. Critics of this proposed legislation will argue that EPA has been effective at implementing FIFRA driven by the requirements of the 1996 Food Quality Protection Act amendments, following a rigorous scientific process with various required safety factors to determine that pesticides used on food meet a “reasonable certainty of no harm” standard. In that view, this bill may be a solution in search of a problem. If this legislation is indeed used as a starting point for reform, there will be many more years before any common ground is found — and common ground likely will be essential for any kind of meaningful FIFRA “modernization.”

©2021 Bergeson & Campbell, P.C.
Article by Bergeson & Campbell, P.C.‘s Government Regulation practice group.
For more articles about toxic substance legislation, visit the NLR Biotech, Food & Drug section.

US to Expand Vaccination Requirement for Foreign National Travelers to Include All Land Border Crossers from Canada and Mexico in January

Starting Jan. 22, 2022, the Biden administration will require foreign national travelers engaged in essential travel to be fully vaccinated when crossing U.S. land borders or ferry terminals. Essential travel includes travel for work or study in the United States, emergency response, and public health. The new rules apply to foreign nationals; U.S. citizens and permanent residents may still enter the United States regardless of their vaccination status but are subject to additional testing requirements.

The new rules for essential travelers are in line with those that took effect Nov. 8, 2021, when the Biden administration lifted travel restrictions to allow fully vaccinated travelers engaged in non-essential (leisure) travel to enter the United States.

While much cross-border traffic was shut down in the early days of the COVID-19 pandemic, essential travelers have been able to travel unimpeded via land borders or ferry terminals. Starting Jan. 22, 2022, however, all foreign national travelers crossing U.S. land borders or ferry terminals – traveling for essential and non-essential reasons – must be fully vaccinated for COVID-19 and provide related proof of vaccination. Any exceptions to the vaccination requirement available to travelers at U.S. land borders are expected to be limited, just as exceptions currently available for air travel have been limited. See CDC guidance for details.

©2021 Greenberg Traurig, LLP. All rights reserved.
For more on vaccine requirements, visit the NLR Coronavirus News section.

Game Changing Reform to NSW Environment Protection Laws

The NSW Government has introduced the Environment Legislation Amendment Bill 2021 (NSW) (Bill) which proposes wide ranging reforms to NSW environmental laws to enable the NSW Environment Protection Authority (EPA) to “crack down” on environmental offenders.

The Bill makes good on Minister Matt Kean’s commitment to ensure that “the book [is] thrown at anyone who has done the wrong thing”. While the EPA has made it clear that the reforms are “aimed solely at those who deliberately choose to circumvent the law”, the amendments proposed by the Bill will materially increase environmental liabilities for all NSW operators.

This article outlines the key reforms proposed by the Bill which will amend a raft of environmental legislation, including the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) and Contaminated Land Management Act 1997 (NSW) (CLM Act) and include:

  • the creation of new environmental offences;
  • increasing the penalties for a number of existing offences;
  • increasing the powers of the EPA and other environment regulators to hold to account those perceived to be responsible for pollution or contamination and to enforce environment protection licence conditions;
  • enabling the EPA to recover profits arising from the commission of environmental offences and the cost of remediating contaminated land from related bodies corporate and directors and managers of offending corporations; and
  • making it easier for the EPA to prove certain environmental offences.

The Bill is expected to be debated by Parliament in early 2022 and, if passed, will result in the largest overhaul of NSW environmental laws in over five years.

KEY REFORMS

Description Analysis
Greater Liability for Directors, Managers and Related Bodies Corporate
  • New power for the EPA and other environment regulators to issue clean-up notices and prevention notices to:
    • current and former directors and persons concerned in management; and
    • related bodies corporate, of companies responsible pollution or contamination, if the company does not comply with notices issued to it.
  • Making it an offence for a:
    • director or person concerned in management;
    • related body corporate; or
    • director or person concerned in management of a related body corporate,

to receive or accrue a monetary benefit as a result of certain proven environmental offences by a company.

  • New and expanded powers for the EPA and other prosecutors to obtain monetary benefit orders requiring:
    • directors or persons concerned in management;
    • related bodies corporate; and
    • directors or persons concerned in management of related bodies corporate,

to repay monetary benefits accrued as a result of certain proven environmental offences by a company.

If passed, the Bill will significantly increase potential liability of those concerned in the management of companies (including related bodies corporate) who commit environmental offences or fail to comply with environment protection notices in NSW.

Managers, directors and related bodies corporate could be put on the hook:

  • to clean up pollution or contamination caused by a company;
  • to carry out works required by a prevention notice to ensure that activities of the corporation are carried on in future in an environmentally satisfactory manner; and
  • to repay “monetary benefits” received as a result of any proven offence.

The proposed measures are not entirely unique to NSW. Queensland passed “chain of responsibility” environment legislation in 2016 and put it to use in the long-running Linc Energy matter.

However, the proposal for directors and related bodies corporate to be automatically liable for an offence if they profit from a proven offence of a corporation under environment protection legislation is likely to be the source of significant concern. This is especially the case as the Bill does not propose any defences. This means that a director or person concerned in management could potentially be liable even if they have taken all due diligence to prevent the commission of the offence by the company, although the EPA is unlikely to commence a prosecution in such circumstances.
New EPA Powers to Regulate Contaminated Land
  • New powers for the EPA to issue clean-up notices and prevention notices as soon as the EPA is notified of contamination of land, even before the EPA has determined that the land is “significantly contaminated”.
  • New power for the EPA to require financial assurances to ensure compliance with under ongoing maintenance orders, restrictions and public positive covenants.
 The new reforms demonstrate the importance on engaging with the EPA at an early stage and on an ongoing basis in relation to contaminated land.

If passed, the Bill would enable the EPA to take strong and proactive action without agreement even before it determines that the land is “significantly contaminated” and warrants contamination.
New Offence of Giving False or Misleading Information to the EPA
  • The Bill includes a new general offence of giving information to the EPA that is false or misleading in a material respect.
  • A defence applies where the person took all reasonable steps to ensure the information was not false or misleading in a material respect.
  • Greater penalties apply where the false or misleading information is provided knowingly.
  • Directors and other persons involved in the management of the corporation will be liable for any offence committed by the company under the new provision if they ought reasonably to know that the offence would be committed and failed to take all reasonable steps to prevent the provision of false and misleading information.

This new false and misleading information offence is significant because it applies regardless of whether the information was provided:

  1. voluntarily; or
  2. in circumstances where the information was known to be false or misleading.

The new offence is an apparent response to the decision in Environment Protection Authority v Eastern Creek Operations Pty Limited [2020] NSWLEC 182, where the defendant successfully resisted an EPA prosecution which alleged that the provision of false or misleading information by establishing that the notice in response to which the information was provided was legally invalid.

The new offence would create material new risks for entities regulated by the EPA, and highlights the need to take great care in taking “all reasonable steps” to ensure that information provided to the EPA is not false or misleading.
Higher Maximum Penalties for Some Environmental Offences
  • Substantial increases to some maximum penalties for offences under environment protection legislation, including the CLM Act, to more than double the current maximum penalties.
 The Second Reading Speech states that maximum penalties have been increased so that “they reflect the true cost of the crime”
Increased Liability for Suspected “Contributors” to Pollution
  • New power for the EPA and other environmental regulators to issue a clean-up notice to persons who is “reasonably suspected of contributing”, to any extent, to a pollution incident.
  • New powers for public authorities to recover costs and expenses of taking clean-up action from persons the authority “reasonably suspects contributed” to the pollution incident, in addition to occupiers and persons the authority reasonably suspects caused the pollution incident.
  • New right for person issued a clean-up notice to recover costs from others who caused or contributed to pollution incidents as a debt.

These new provisions are likely to be of significant concern, as they enable the EPA to issue clean-up notices requiring alleged contributors to pollution incidents to clean-up all of the pollution, at its cost. This has the potential to lead to the unintended result that:

  •  suspected contributors could be made liable for clean-up costs far exceeding their actual contribution; and
  • the EPA may seek to regulate the potential contributor with the “deepest pockets” – rather than the person most directly responsible.

While the Bill includes a right for a contributor to recover costs from others who caused or contributed to the pollution incident as a debt, this offers very limited protection to suspected contributors issued a clean-up notice, particularly if the person responsible or other persons responsible have limited financial capacity.
Expanded Environmental Licensing Powers
  • The Bill includes a new power for the EPA to require restrictions on the use of land or pubic positive covenants to enforcing environment protection licence conditions (including conditions imposed on the suspension, revocation or surrender of the licence). In line with this, the Bill also includes new provisions to enable a person other than the holder, or former holder, of a licence, to apply to vary the conditions of the suspension, revocation or surrender of the licence.
  • New ability for the EPA to deny environment protection licences to corporations where current or former directors of the corporation, related bodies corporate or for current or former directors of related bodies corporate have contravened relevant legislation.
 The proposed power to impose restrictions on use and public positive covenants to enforce licence conditions is material as, currently, licence condition only bind the holder of the environment protection licence. The changes proposed will enable the EPA to legally enforce conditions against land owners or occupiers, even if the activity regulated by the environment protection licence was conducted by a former land owner or tenant.

The EPA will now be able to take a deeper look at the overall environmental compliance history of an entity in licensing decisions, meaning that it will be even more important for corporations, directors and managers to maintain a strong environmental compliance history.
Consistent Court Powers including for Cost Recovery
  • Additional powers for public authorities including the EPA or other persons to recover costs, expenses and compensation from offenders in the Land and Environment Court.
  • Additional powers for the Land and Environment Court to make specific kinds of orders where environment offences are proven.
 The Bill proposes to have more consistent provisions across environment protection legislation in terms of the orders a court can make in relation to offenders, and the cost recovery that the EPA can seek from the Court.
New Offence to Delay Authorised Officers
  • The Bill contains a new offence of delaying, obstructing, assaulting, threatening or intimidating an authorised officer in the exercise of the officer’s powers, in addition to the existing offence of wilfully delaying or obstructing an authorised office.

This is an apparent response to the McClelland and Turnbull matters which involved the assault or delay of environment protection officers. The new offence is significant because the EPA would not be required to prove that the relevant delay or obstruction was willful, and so a person could be held liable for unintentional delays or obstructions.
Expanded Prohibition Notice Powers
  • Expanded power for the Minister to issue prohibition notices to occupiers of a class of premises or to a class of persons.
  • Expanded power to issue prohibition notices to directors, former directors or related bodies corporate of a corporation who has not complied with a prohibition notice.
 Currently, the Minister can only issue prohibition notices requiring occupiers or persons to cease carrying on an activity.

The Bill proposes to enable the Minister to prohibit occupiers of a class of premises or a class of persons from carrying on an activity. This would enable the Minister to shut down all of the premises of so-called “rogue operators”, if recommended to do so by the EPA. While it is likely to be rarely (if ever) used, the expanded power could potentially be relied on by the Minister where a pattern of non-compliance is identified across a specific industry or across multiple premises of one organisation.
Administrative Reforms to EPA
  • The Bill also proposes a range of administrative The most notable reform is to considerably reduce the Minister’s control of the EPA so that the EPA is no longer subject to the control or direction of the Minister, and that the Minister only has a limited power to issue directions of a general nature to the EPA.
 The EPA is generally regarded as an “independent” regulator, and the proposed reform formally reduces Ministerial control of the EPA thereby increasing its independence.

The Bill also includes some additional measures regarding board appointments to achieve greater diversity of collective skills, including expertise in human health and Aboriginal cultural values.

PUBLIC CONSULTATION ON POEO ACT REGULATIONS

In addition to the reforms contemplated by the Bill, the EPA is currently consulting on the following regulations under the POEO Act:

  • Protection of the Environment Operations (Clean Air) Regulation 2021 (NSW); and
  • Protection of the Environment Operations (General) Regulation 2021 (NSW).

Each of these regulations:

  • were remade with only minor amendments earlier this year, to avoid automatic repeal under the Subordinate Legislation Act 1989 (NSW); and
  • will be substantively amended in 2022. The EPA has committed to carrying out consultation on the proposed changes in 2022.

IMPLICATIONS

The reforms contained in the Bill demonstrate how important it is for all businesses which operate in NSW, and their related bodies corporate, directors and managers to:

  • take environmental compliance very seriously; and
  • work effectively with the EPA to address any pollution and contamination issues.

Copyright 2021 K & L Gates

Article by Kirstie Richards and Luke Salem with K&L Gates.

For more articles on climate change initiatives, visit the NLR Environmental & Energy section.

Given Deadlines Set by Sixth Circuit, ETS Likely Stayed Until At Least December 10, 2021

Earlier this month, the Occupational Safety and Health Administration (“OSHA”) issued its “COVID-19 Vaccination and Testing; Emergency Temporary Standard” (the “ETS”) requiring employers of 100 or more employees to implement policies requiring employee vaccination or enhanced safety measures for unvaccinated employees (including wearing face coverings and weekly COVID-19 testing). Our alert on the ETS is here. The ETS was subject to over 30 petitions for review in the federal circuit courts and was quickly stayed by the United States Court of Appeals for the Fifth Circuit.

Although the petitions for review were consolidated before the United States Court of Appeals for the Sixth Circuit, the Fifth Circuit’s stay remains in place. While OSHA has publically stated that it will comply with the stay, its position has been – and continues to be – that employers should prepare to comply with the ETS and that OSHA will succeed in litigation challenging the ETS. Yesterday, OSHA filed an emergency motion to immediately lift the stay.

With the stay in place, covered employers have been in the difficult position of trying to determine how much preparation to do to comply with the ETS’s requirements, many of which are scheduled to be effective on December 6, 2021. The question has been whether the stay will continue beyond the initial deadlines and, if not, whether deadlines will be extended to account for the period during which the ETS was stayed.

The deadlines set out in the Sixth Circuit’s Scheduling Order, which is available here, provide some insight into the timing of the requirements of the ETS.  The Scheduling Order sets the following briefing deadlines:

  • Tuesday, November 30, 2021 – motions to join OSHA’s emergency motion or to modify, revoke, or extend the stay.
  • Tuesday, December 7, 2021 – responses to motions regarding the stay.
  • Friday, December 10, 2021 – replies to responsive motions.

Given these deadlines, it is likely that the ETS will continue to be stayed until at least December 10th (past the December 6, 2021 deadline) while the Sixth Circuit considers briefing.  However, it is possible that, before December 10th, the Sixth Circuit lifts the stay. If the stay is lifted, the ETS requirements could become effective on the date of the court’s order or on a later date set by the Sixth Circuit.

While the briefing schedule does not provide definitive answers to employers on the potential deadlines for ETS compliance, it suggests that the ETS’s December 6, 2021, deadlines may be extended for at least a few days while the Sixth Circuit considers briefing.

© 2021 Bracewell LLP
For more on OSHA COVID-19 updates, visit the NLR Coronavirus News section.