Green Building Law Update

Environmental Law and Sustainability for Business

Mold in the John Hanson House: Court Preserves Government Immunity at the Expense of Human Health

By Stuart Kaplow on Posted in Local Government, State

Earlier this month, the Maryland Appellate Court issued a controversial ruling in Candace McCarthy v. Board of Commissioners for Frederick County, Maryland, holding that Frederick County is immune from a negligence claim stemming from mold exposure in the historic John Hanson House.

The decision, issued on the same day Maryland’s new mold exposure law took effect, has drawn sharp criticism in both legal and environmental communities, many arguing that the court applied an outdated legal framework that fails to address modern environmental health risks in a historically preserved building.

“The King Can Do No Wrong”

The doctrine of sovereign immunity originates in English common law, where the Crown could not be sued in its own courts without its consent. This principle, rex non potest peccare (the king can do no wrong), was imported into American legal doctrine and became embedded in U.S. jurisprudence at both the federal and state levels.

A Historic Home, A Modern Health Hazard

The John Hanson House, named after the first person to serve a full term as President of the United States in Congress Assembled under the Articles of Confederation (1781–1782), is part of Frederick County’s courthouse complex. The County acquired the 4.3 acre property in 1975 with plans to renovate the 1700s structure for commercial and office use. Since 1984, the Office of the Public Defender, a state agency, has leased space in the building.

In 2018, Public Defender employee Candace McCarthy complained of mold in the building’s basement. Testing confirmed its presence. McCarthy alleges that exposure to mold in the John Hanson House contributed to her development of an autoimmune disease. She brought a negligence claim against the County, asserting its failure to maintain safe conditions in the leased space.

The Court: Governmental Immunity Prevails

The Maryland Appellate Court affirmed the dismissal of McCarthy’s lawsuit on the grounds of governmental immunity. Local governments, counties, municipalities, and other subdivisions are not “sovereigns” in the constitutional sense, but they still enjoy forms of immunity under state laws, and in this instance under Maryland law.

Citing longstanding Maryland law, the court concluded that Frederick County’s maintenance of the John Hanson House qualified as a “governmental function,” not a “proprietary” one, thus shielding the County from liability.

In its reasoning, the court applied the State’s four factor test to determine whether a government action is “governmental”: (1) Authorized by legislative mandate; (2) Performed solely for public benefit; (3) Without private profit or emolument; and, (4) Designed to promote public health or welfare.

Although the County collected rent from the Public Defender, the court deemed this reimbursement for operating costs, not profit, emphasizing that the building’s integration into the courthouse complex affirmed its governmental nature. The failed maintenance of the John Hanson House, the court concluded, was thus immune from tort liability.

A Faulty Framework for the 21st Century

That conclusion might make sense in the abstract, but in the context of this case, it reflects a profound legal blind spot. Mold in historic structures, particularly Colonial buildings like the John Hanson House, is a foreseeable risk that arises from known construction vulnerabilities. These include the use of porous materials like wood, horsehair plaster, and brick, along with the absence of vapor barriers, waterproofing, or modern ventilation systems.

This isn’t an abstract or rare concern. Mold is common in historic buildings reused for modern occupancy in Maryland (.. not to mention privately owned buildings). The risk is exacerbated in structures with subterranean or poorly ventilated areas, like the basement of the John Hanson House, where moisture accumulates and fungi thrive.

That Frederick County failed to prevent or remediate mold in a structure it actively leased for office use after actual notice of the indoor air quality issue should raise serious concerns. That the law prevents a harmed individual from seeking a remedy only underscores how governmental immunity can serve as a blunt instrument that thwarts justice and the safety of the governed.

A Legal Decision Issued the Same Day as a New Mold Law?

The timing of the court’s ruling only highlights the gap between emerging environmental health realities and ossified legal doctrine. On the same day the appellate decision was published, Maryland’s new mold law, 2025 Senate Bill 856, took effect. The statute, for the first time, regulates mold in rental properties. While it doesn’t apply retroactively, the legislation represents the state’s growing recognition that mold exposure is a serious public health risk, deserving for the first time, state regulation; but how will the law be implemented for public buildings?

Maryland has expanded the role of government to now include the regulation of mold in rental properties, but this mold claim is rebuffed because the County landlord is pursuing a government function. But for Candace McCarthy, that regulation comes too late. Moreover, there is some irony there?

Preservation or Public Health? Why Not Both?

Historic preservation is a commendable public policy goal. The adaptive reuse of heritage buildings, including those with Revolutionary era roots like the John Hanson House, plays a vital role in community identity and sustainability.

But preservation must not come at the cost of human health. It is unacceptable to restore and repurpose buildings from the 1700s without modernizing them to meet 21st century indoor air quality standards. People today spend nearly 90% of their time indoors, according to the EPA. Indoor air, often more polluted than outdoor air, is a frontline environmental health concern. Biological contaminants like mold can cause severe, even lifelong, respiratory and immune system conditions as alleged here.

If we are to responsibly preserve the past, we must ensure those buildings do not harm the people living and working in them today.

A Legal System Behind the Times

The real issue is not with the court’s logic, within the confines of current Maryland law, the ruling arguably got it right. Rather, the problem lies with the doctrine of governmental immunity itself. While total immunity is conferred on the State of Maryland and its agencies, counties and municipalities receive limited immunity when acting in a “governmental” capacity. That distinction, however, is increasingly unworkable in the modern world.

In this case, the County acted not as a sovereign authority, but as a landlord leasing office space in a commercial arrangement. Yet, because the building was nominally part of a state courthouse grounds and complex, the County was deemed immune from responsibility for known, preventable environmental hazards.

It is a fundamental precept of our constitutional order that for every wrong, there is a remedy. Sovereign immunity erodes that guarantee.

Conclusion: Modernize Government Immunity

The McCarthy case illustrates the urgent need for Maryland and other states to modernize doctrines of governmental immunity, particularly when public health is at stake. As science based professionals and legal commentators have noted, this decision applies an 18th century legal shield to a 21st century environmental issue. That’s not just injudicious, it’s dangerous.

Critics argue that the original rationale, “the King can do no wrong,” is an anachronism in a modern constitutional democracy. The government is not a monarch, and the people are not subjects. Justice John Paul Stevens once wrote that absolute immunity “runs counter to democratic principles of accountability.”

It is time to recalibrate the balance between governmental protections and individual rights in the face of evolving environmental hazards. McCarthy’s case is not just about mold. We are reminded of children injured by lead based paint in government housing who have been denied justice.

This case is about whether our legal system is equipped to respond to the real world impacts of outdated building practices and whether our governments, local, state, and federal, will be held accountable when they fail to protect the people they serve.

Historic buildings deserve preservation. But so do the people who work in them. The bottom line is that limited immunity should protect governance, not shield harm.

You can read the full decision here:
Candace McCarthy v. Board of Commissioners for Frederick County, Maryland

How will Your Business Benefit from the One Big Beautiful Bill?

By Stuart Kaplow on Posted in Energy, Environmental, Federal

We have been fielding questions about the One Big Beautiful Bill Act, which passed Congress last week and was signed by the President on July 4th, and thought that as this turns from a partisan debate to now being the law, this initial analysis would be relevant, urgent, and provide utility to our readers.

Enacted as a budget reconciliation bill that only requires a simple majority in the Senate (instead of needing 60 votes to avoid a filibuster), it reduces taxes, reduces or increases spending for various federal programs, otherwise addresses agencies and programs throughout the federal government, and on page 686 the statutory debt limit “is increased by $5,000,000,000,000.” (.. that is 5 Trillion dollars, but who is counting?).

It is likely not possible to overstate how consequential this sprawling legislation is, fundamentally realigning the role of government in the image of President Trump’s economic and social vision. The impact will be felt by literally every household and business in the country.

This blog post will not address the vast majority of the provisions in the nearly 1,000 page H.R. 1, from “no tax on tips” (up to $25,000), “no tax on overtime” (up to $12,500), “no tax on car loan interest” (up to $10,000), a new tax deduction for “senior citizens” ($6,0000 per individual), and more, but rather this is a quick compilation of the key environmental matters our clients have been asking about.  

Be clear, the big, beautiful bill is not “anti” protecting the environment and human health; rather, it represents a rising movement of environmentalists who believe you can care about the planet and still hold conservative values. This bill has reclaimed the environmental debate from the left and made it their own. Eco conservatives tend toward an all of the above approach to the environment and energy policy. Those solutions are articulated in this bill, and there is a lot more common ground than the legacy media reports in the exhausting news cycle, when it focuses all but exclusively on the bill’s implications for Medicare to the detriment of other matters, including environmental issues.

Many of the clients we have spoken with view this mega bill, and importantly, when considered concomitantly with the President’s Executive Orders, as a huge necessary and positive course correction in environmental and energy public policy for the nation.

Environmental highlights from the law include:

179D: Energy Efficient Commercial Buildings Tax Deduction that was permanent and was widely utilized, “.. is amended by adding at the end the following new subsection: ‘‘(i) TERMINATION. – This section shall not apply with respect to property the construction of which begins after June 30, 2026”.’’ But like much else in this bill, the Biden era altered program is now ended, but with 100% first year “bonus depreciation,” a feature of the Trump 2017 tax cuts being reinstated, real estate developers are winners in this new law. 

45L: New Energy Efficient Homes Credit utilized in many residential properties, “is amended by striking ‘‘December 31, 2032’’ and inserting ‘‘June 30, 2026’’ as the credit’s end date.” A sister federal tax incentive, also altered by the Biden Administration, for residential building not eligible for 179D, this will now sunset on June 30, 2026.

25C: Energy Efficient Home Improvement Tax Credit “is amended by striking ‘‘placed in service’’  .. through December 31, 2032’’ and inserting ‘‘placed in service after December 31, 2025’’ ending the incentive this year.”

25D: Residential Solar, other home energy systems credits, “is amended by striking ‘‘to property placed in service after December 31, 2034’’ and inserting ‘‘with respect to any expenditures made after December 31, 2025.”

Of note, that while wind and solar industry are clear losers in this new law, especially any project relying on foreign components, there are no new excise taxes on wind and solar projects; that proposed provision was removed from the bill in the final hours. And the bill preserves existing tax incentives on technologies like advanced nuclear, battery storage, hydropower, and geothermal energy, again advancing the all of the above approach to environmental and energy policy..

30C: Alternative Fuel Refueling Property Credit, “is amended by striking ‘‘December 31, 2032’’ and inserting ‘‘June 30, 2026’’.”

30D: New Clean Vehicle Credit “is amended by striking ‘‘placed in service after December 31, 2032’’ and inserting ‘‘acquired after September 30, 2025’’.”

Beyond sunsetting certain tax deductions and credits, “unobligated funds from the following programs are rescinded, effectively terminating the programs.  All unobligated funds will be remitted to the U.S. Treasury’s general fund.” The programs eliminated include:

Greenhouse Gas Reduction Fund (providing dollars to non profits)

American Innovation and Manufacturing Act (aimed at reducing GHGs)

Greenhouse Gas Corporate Reporting Fund (providing $27 Billion to reduce GHGs)

Environmental Product Declaration Assistance Fund (to drive EPDs into use)

Greenhouse Gas Air Pollution Plans and Implementation Grants, and many more ..

The bill phases out and terminates multiple energy related federal tax credits, and generally terminates the clean electricity production tax credit for an otherwise qualified facility placed into service after 2028 or for which construction begins after 60 days from the date of enactment of this section (under the prior law, a tax credit is available for the production and sale of zero emissions electricity by a qualified facility placed into service after 2024.)

The bill repeals a program under which the EPA provides “(1) grants and rebates to replace certain medium-duty vehicles (e.g., school buses) and heavy-duty vehicles (e.g., garbage trucks) with zero-emission vehicles, ..” and a host of other Inflation Reduction Act of 2022 programs.

Also the bill “.. nullifies the final rule issued by the National Highway Traffic Safety Administration (NHTSA) titled Corporate Average Fuel Economy Standards ..” under a related rule, NHTSA finalized CAFE standards for passenger cars and light trucks that increase at a rate of 2% per year for passenger cars in model years 2027-2031, ..”

Further, the bill seeks to reduce burdens on energy development, including:

Delay the methane emissions fee, imposed by the Biden IRA on certain methane emissions from oil and natural gas sources for 10 years, to 2034.

Expedited National Environmental Policy Act of 1969 (NEPA) review, will be available from the newly created White House Council on Environmental Quality program by paying an optional fee, 125% of the anticipated costs to prepare the environmental impact statement to have the environmental assessment completed no later than 180 days after paying the fee.

There are new provisions to encourage investments, including in real estate, a sector that, as described above, is a winner under this law:

Opportunity Zones are made permanent, although the definition of “low-income community” is narrowed.

45D: New Markets Tax Credit, which would have expired this year, is made permanent.

The extraordinary breadth and scope of this bill result in it being one of the most consequential pieces of U.S. legislation in modern times.

The enactment contains hundreds of provisions and directly impacts trillions of dollars in spending that must also be seen for its sweeping domestic policy changes, so it is not possible to simply summarize the enactment. We could have written hundreds of words alone about the new requirement that the Department of Transportation secretary “impose fees for space launches and reentries based on payload weight,” but such is beyond the scope of our effort here to highlight environmental and energy changes.

While the bill does more than impact any one sector, significantly, it has reclaimed the environmental debate from the left and made stewardship of land, air, and water their own. Eco conservative’s all of the above approach to environmental and energy policy is evident throughout this legislation.

To determine how the regulatory changes and funding shifts will impact your business, you can search the bill at this link, or better yet, to appreciate all of this in context, read about the William McKinley presidency. If you have a specific question, email me and ask. As the big beautiful bill is implemented, including as the action turns to regulations and agency guidance, we will post more about all of this in the coming days, ..

Fireworks and the Law: A Rare Case of Regulatory Restraint in Environmental Protection

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

In the storied words of John Adams in his July 3, 1776 letter to Abigail, “It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.”

Nearly 250 years later, Americans have embraced his vision with gusto, setting off roughly 275 million pounds of fireworks each year, an astonishing jump from about one tenth of a pound per person in 1976, the U.S. Bicentennial year, to nearly one pound per person today, the vast majority imported from China. Yet, while these fleeting bursts of color and sound delight millions, they also release fine particulate matter and trace metals into our air, raising the perennial question of do we need to balance environmental protection with our national traditions?

A Surge in Particulate Pollution – But Only Very Briefly

A groundbreaking 2015 study by NOAA quantified the impact of Independence Day fireworks on particles (less than 2.5 microns in diameter) using data from 315 monitoring sites nationwide. On average, 24 hour particulate matter concentrations during the 6 pm to midnight window on July 4th were 42% higher than on surrounding days, with the largest hourly spike occurring between 9 pm and 10 pm and levels returning to baseline by noon on July 5th. While some urban monitors briefly recorded readings above the EPA’s 24 hour standard, the spike is both short lived and localized; by the next day, air quality rebounds, minimizing sustained exposure risks.

The Chemistry Behind the Celebrations

Fireworks owe their brilliance to metal salts: strontium compounds create deep reds, sodium salts produce yellows, barium yields vibrant greens, and copper compounds, particularly copper chloride, give those rare blues. In a typical aerial shell, potassium perchlorate serves as the oxidizer, charcoal and sulfur form the black powder propellant, and dextrin or other binders hold star compositions together.

Upon ignition, these materials combust and aerosolize, generating particulate matter laden with metal residues. Yet, because fireworks are designed to detonate at altitude, much of the debris disperses high above ground level, diluting before reaching populated areas.

Minimal Federal and State Regulation

In the United States, the federal government sets only the minimum standards for consumer fireworks under CPSC and ATF regulations, limiting composition weights and lash powder quantities, but does not regulate their use for air quality purposes. Beyond safety permits issued by state fire marshals (for “firework shooters,” manufacturers, and sellers), nearly every jurisdiction, 49 states plus DC, allows some form of consumer fireworks; Massachusetts stands alone in banning their sale and use without a permit. Local permits for large displays may be required, but enforcement focuses almost entirely on fire and injury prevention, not emissions control.

Exceptional Events and the Clean Air Act

Recognizing that the brief particulate surges from fireworks are integral to traditional celebrations, Congress and EPA have treated them as “exceptional events” under 40 CFR § 50.14, alongside wildfires and high winds, allowing states to exclude fireworks influenced data from regulatory determinations if they demonstrate a clear causal link to cultural events like July 4th festivities.

The Rose Park, Utah “Fireworks Exceptional Event” report illustrates this process: filter analysis showed greater than 75% of particulate matter mass attributable to black powder components (potassium nitrate, sulfur, carbon) and trace metals, and light evening winds carried plumes to monitoring sites; EPA concurred in 2019 that these data be excluded from design-value calculations, preserving attainment status without penalizing cultural traditions.

Temporary Guidance for Sensitive Populations

Although the EPA’s “Particulate Matter Pollution” webpage offers general tips for reducing particulate matter exposure, it’s now archived fireworks specific guidance acknowledged that while most individuals experience no effects from short exposures, infants, children, and persons with respiratory conditions may be more sensitive. Accordingly, vulnerable individuals are advised to watch displays from upwind locations or indoors, though practical avoidance is challenging near community events.

Beyond Air: Coastal Waters and the Clean Water Act

In coastal regions like San Diego, concerns shift from air to water. Under an NPDES general permit (Order No. R9-2022-0002), any fireworks display over ocean or bay waters must minimize fallout and debris via best management practices (post-event cleanup, debris collection), balancing aquatic protection with public celebration. Litigation by San Diego Coastkeeper and CERF against SeaWorld highlights enforcement under the Clean Water Act, pressing for strict adherence to discharge permits and exploring nonpolluting alternatives like drone shows.

Judicial Remedies vs. Regulatory Chills

Where actual harms arise, whether fire start incidents or debris induced water pollution, traditional tort and Clean Water Act enforcement mechanisms remain available. But absent concrete injuries or permit violations, courts have little basis to curtail fireworks that fleetingly degrade air quality. This deference reflects a societal judgment: the joy and unity fireworks engender outweigh their transient environmental footprint.

Conclusion: A Model of Regulatory Restraint?

Fireworks, first developed in 2nd century BC China, have illuminated human festivities for millennia. In the U.S., our legal framework largely exempts them from lasting regulation under air and water laws, treating particulate surges as short lived cultural trade offs rather than ongoing public health threats. We recognize this as a rare instance where the balance tips sharply toward tradition, with minimal bureaucratic burden.

Perhaps other regulatory arenas could learn from this “explosive” example, favoring cultural values and individual enjoyment over heavy handed controls, so long as real harms remain negligible and remedies for actual damage endure.

In the interests of disclosure, I do not represent any fireworks manufacturers, but I do very much enjoy a good copper chloride blue. Happy 4th of July!

Maryland Expands Bat Protections: New Law Shifts Approach to Biodiversity

By Stuart Kaplow on Posted in Codes and Regulations, Environmental, Federal, State

Biodiversity degradation is an existential crisis affecting planetary and human health. Since the enactment of the federal Endangered Species Act in 1973, populations of mammals, birds, amphibians, and fish have dropped a shocking 68%.

As scientists and policymakers grapple with addressing the rapid and widespread decline in species, states like Maryland are exploring regulatory strategies that extend beyond traditional frameworks such as the federal ESA. One such initiative is embodied in Senate Bill 946, passed in the 2025 Maryland General Assembly session and now chaptered under the title “Endangered and Threatened Species – Incidental Taking – Bats.”

This new law marks a significant expansion of one state’s regulation of species protection and introduces a new permitting process that will substantially affect landowners, utility companies, and small businesses operating in Maryland. While initially sponsored by an Eastern Shore lawmaker who described encouraging the forestry industry, the bill’s implementation raises real questions about the efficacy of this government action and its negative economic impact.

Bats make up roughly one fourth of all mammal species, but are any of them going to be saved from human activity by this new law that will be expensive for businesses across Maryland to comply with?

A New Framework for Bat Conservation

Senate Bill 946 authorizes the Maryland Secretary of Natural Resources to issue a permit for the “incidental taking” (.. the unintentional or accidental harming of a protected species) of four species of bats:

  • the Indiana bat,
  • the eastern small footed bat,
  • the northern long eared bat, and
  • the tricolored bat

.. provided that applicants submit a detailed conservation plan and meet stringent criteria. This is a notable policy development: While incidental take permits exist under the federal ESA, Maryland’s Nongame and Endangered Species Conservation Act has previously not authorized these state level permits. The state is now asserting its independent authority to regulate even those species not federally protected, like the eastern small footed bat (after the U.S. Fish and Wildlife Service “found that listing was not warranted” because the culprit in its decline was not humans but a fungus), further expanding the state’s conservation reach.

The same is the situation with the tricolored bat that was proposed for listing by the Biden Administration, but is not currently federally listed as endangered.

While much is known about the federally listed bats, the same cannot be said for the two now Maryland only protected bats, state approved conservation plans must detail:

  • Expected impacts from the activity;
  • Measures to minimize and mitigate those impacts;
  • Financial resources to carry out the plan;
  • Alternatives considered; and
  • Any other measures deemed necessary by the Secretary.

Moreover, the Secretary must affirm that each proposed incidental taking:

  • Will not appreciably reduce the survival of the species;
  • Will be minimized to the extent practicable;
  • Is supported by adequate funding and implementation commitments; and
  • Complies with applicable federal authorizations.

What Bats Are We Talking About?

Maryland is home to 10 bat species, most tree bats and some cave bats. These include migratory species as well as hibernating species that dwell in tree cavities, attics, and even building structures. Bats provide immense ecological benefits, including insect control, pollination, and seed dispersal.

Economic and Regulatory Implications

The Maryland Department of Natural Resources acknowledges that Senate Bill 946 “may have a material impact on small businesses.” Companies, and not just those in construction, energy, agriculture, and forestry, will find themselves subject to new permitting obligations, seasonal activity restrictions, and conservation compliance obligations (i.e., preparing a conservation plan and pursuing state permitting approval) if their operations occur in bat sensitive areas.

Prior to this law, businesses working within the framework of the ESA often managed compliance through federal incidental take permits. Now, Maryland businesses must also navigate a yet to be announced state level conservation permitting regime, potentially duplicating regulatory efforts or facing stricter localized requirements. Importantly, the bill gives the Secretary broad discretion to adopt regulations, meaning more detailed submittals and possibly onerous rules may be forthcoming, but significantly, the state does not have personnel or a budget for this entirely new program?

This has prompted concerns from affected businesses. From time of year work restrictions on tree felling to limitations on land disturbance near roosting sites, the costs and delays associated with bat protections will mount making doing business in Maryland more expensive. For many small businesses, particularly in rural or exurban areas, this may result in burdens disproportionate to their role in the broader biodiversity issue.

Is This the Right Approach to Biodiversity Loss?

There is no question that biodiversity loss is real and consequential. Maybe a million species are at risk of extinction, many within decades. The loss of biodiversity not only affects ecosystems but has direct human consequences, undermining food security, increasing zoonotic disease risk, etc.

That observed, whether Maryland’s expanded bat regulation represents an efficacious response is an open question. Critics argue that the permitting regime will create bureaucratic friction without clearly measurable conservation gains. There is little evidence that incidental take permitting, particularly when implemented at the state level without robust enforcement and funding, meaningfully alters the trajectory of species recovery.

Additionally, the problem is not the killing of bats by humans. The Boogeyman is White nose syndrome, a deadly fungal disease that has caused 90 to 100 percent declines in tri colored bat colonies in Maryland. This new law does nothing to address that, so ..

Moreover, layering additional state level requirements on top of existing federal processes may not address the underlying drivers of biodiversity loss, namely habitat fragmentation, climate change, and invasive species.

What Should Maryland Businesses Do Now?

We have assisted clients in navigating federal bat related regulatory requirements, including the preparation of habitat conservation plans and negotiation with U.S. Fish & Wildlife Service officials. Now, with Senate Bill 946, the same type of work will be needed for state authorization in Maryland.

Businesses should consider:

  • Conducting early habitat assessments if operating in areas with known bat activity;
  • Developing internal compliance protocols to track time-of-year restrictions;
  • Monitoring forthcoming regulations from DNR; and
  • Budgeting for conservation plan preparation and potential project delays.

With more bat species under Maryland’s regulatory umbrella, proactive engagement is not only a legal necessity, it may also protect businesses from unforeseen enforcement and reputational risks.

Conclusion

Maryland’s Senate Bill 946 represents a bold step into an increasingly complex realm of environmental regulation. While bats are undeniably important to the health of ecosystems and worthy of protection, the bill’s real world effectiveness in slowing biodiversity loss is questionable at best. This new law does nothing to address White nose syndrome responsible for more than 90 percent of the bat decline.

What is certain is that businesses need to be prepared for the operational and compliance burdens this law introduces.

If your business could be affected by bat conservation measures, federal or state, we can assist in assessing impacts, designing mitigation strategies, and navigating the new permitting landscape in Maryland. As state biodiversity law continues to evolve beyond the longstanding federal framework, effective legal counsel will be critical to balancing business operations with environmental compliance.

All Electric Future Faces Legal Threat After Supreme Court Ruling

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Energy

In a pivotal environmental case with wide reaching implications, the U.S. Supreme Court ruled last Friday that a group of fuel producers have Article III standing to challenge the EPA’s approval of a waiver under the Clean Air Act permitting California regulations (.. adopted in 17 states) requiring automakers to manufacture more electric vehicles and fewer gasoline powered vehicles.

In a 7–2 decision issued on June 20, 2025, in Diamond Alternative Energy, LLC v. EPA, the Court ruled that a group of oil and gas companies have standing to challenge California’s zero emissions vehicle regulations, reviving a lawsuit that had been dismissed by the D.C. Circuit for lack of standing.

Legal commentators and media headline writers alike are describing this as the Supreme Court delivers a final blow to California’s imperiled emission standards. It is actually much more than that, including having an impact from Maryland to Oregon and Vermont to New Mexico, and ..

The Legal Issue: Who Can Sue and Why It Matters

At the heart of the case was whether a group of fuel producers, who (.. make gasoline and ethanol, etc.) are not directly regulated by the California rules (.. that regulate the sale of cars), could sue the U.S. Environmental Protection Agency for approving the state’s greenhouse gas emissions standards under the Clean Air Act.

“The government generally may not target a business or industry through stringent and allegedly unlawful regulation, and then evade the resulting lawsuits by claiming that the targets of its regulation should be locked out of court as unaffected bystanders,” the Supreme Court opinion says.

“We reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.”

Explaining the challenged California regulations, the Court wrote the “regulations generally require automakers (i) to limit average greenhouse-gas emissions across their fleets of new motor vehicles sold in the State and (ii) to manufacture a certain percentage of electric vehicles as part of their vehicle fleet.”

“To date, acting pursuant to the Clean Air Act, 17 States and the District of Columbia have copied California’s greenhouse-gas emissions standards for new motor vehicles, the electric-vehicle mandate, or both,” the opinion describes.

Fuel producers argued that the EPA and California had exceeded the scope of the 1970s era Clean Air Act, which, despite preempting states from enacting their own limits, allows the heightened standards in California to address smog in California. California’s new emissions standards, adopted in 17 states after being approved for California, “did not target a local California air quality problem, as they say is required by the Clean Air Act, but instead were designed to address global climate change,” Justice Brett M. Kavanaugh wrote, using italics to describe the industry’s position.

The Court’s opinion emphasized that even incremental changes in fuel sales would satisfy the requirement for standing.

A Blow to State Climate Authority

Though the decision does not resolve the underlying case, it clears the way for the lawsuit to move forward, potentially setting the stage for a broader dismantling of California’s regulatory authority over emissions and vehicle standards. This is a critical development because, for decades, California has exercised a unique role under Section 209 of the Clean Air Act, which allows the state to set stricter air quality standards than the federal government, with EPA approval.

Fun fact. California has received more than 100 waivers under the Clean Air Act.

The current challenge aims to roll back that authority. The industry’s argument, supported now by a majority of the Court, is that California’s EV mandates are not truly about local smog or air pollution but are instead an improper attempt to regulate global carbon emissions and climate change through a legacy statute.

A Broader Political Assault on Climate Regulation

The Supreme Court’s decision comes on the heels of political efforts in Washington, D.C. We blogged in advance of President Trump’s signing last week of three Congressional Review Act resolutions disapproving the same Biden administration’s EPA rules that are the subject of this Supreme Court case. At the bill signing ceremony, President Trump declared that “our Constitution does not allow one state special status” to dictate national energy and transportation policy.

The California waiver and all of the state approvals are now in serious jeopardy.

The Dissenting Voices

The majority opinion rejected the argument that “surging consumer demand” for electric vehicles meant that invalidating the regulations would not cause auto makers to make more fossil fuel vehicles. Relying on “commonsense economic principles” and record evidence, the Court reasoned that it was sufficiently “predictable” that invalidating California’s regulations would likely redress the fuel producers’ injury.

Justice Sonia Sotomayor and Justice Ketanji Brown Jackson dissented from the majority.

Justice Jackson, in particular, warned that the Court’s ruling “gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.” She argued that the case was largely moot because of the recent Congressional resolutions and that the Court’s intervention signals a troubling judicial trend favoring powerful industries over environmental protection.

What Comes Next?

With the case now remanded to the lower courts, the legal validity of California’s emissions standards (.. in use in 17 states) will all but certainly be repealed. Many suggest the only question to be resolved is whether states retain any meaningful authority to regulate greenhouse gas emissions from vehicle electrification to building electrification, in the face of federal opposition.

For businesses and environmental lawyers alike, Diamond Alternative Energy is more than a procedural decision about standing. It is a shot across the bow in what is quickly becoming a sweeping redefinition of state and federal roles in climate policy. As legal challenges mount and Congress shifts direction, state climate change initiatives may be headed for a constitutional reckoning.

Mold Testing in Maryland Real Estate under the New Law

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

Landlords, property managers, and real estate professionals across Maryland are about to enter a new era of regulating mold. With the General Assembly’s recent passage of Senate Bill 856, Maryland has taken a significant step toward being the first state to codify fungal growth in real estate.

The new law, which goes into effect in 2027, requires landlords to remediate reported mold, but stops short of requiring mold testing or sampling. This has left many asking: Should a landlord test or sample for mold, and is this something that should be included in every lease?

What are Molds?

Molds are a natural part of the environment and can be found almost everywhere that moisture and oxygen are present.

As an environmental attorney with decades of experience counseling clients on mold issues, and having provided expert testimony in litigation where mold was a core issue, I can say unequivocally that mold sampling is, in nearly every instance not necessary, and sometimes counterproductive. But of import, this is a new and emergent body of law where no other states have attempted what Maryland is regulating (where several states and maybe a score of locals have included under residential ‘habitability’ standards visible mold and moisture).

Mold is Ubiquitous and Testing Has Limits

There are more than 100,000 known species of mold, part of the larger fungal kingdom which includes an estimated 2.5 million species, most of which have not been scientifically classified. Molds are everywhere, both indoors and outdoors, and the Centers for Disease Control and Prevention puts it bluntly: “There is always some mold around.” Spores enter buildings through open doors, windows, vents, HVAC systems, and even on people and pets.

In many instances, airborne spore counts are higher outside of a building than inside. An as yet unpublished scientific journal manuscript reported in multiple instances in June 2024 that the District Court for Prince George’s County, Maryland, found a livability code violation for mold, that airborne mold counts were higher outside of the rental apartment buildings than in the units (.. and the study observed that high pollen counts on those days may have exacerbated the perception of the impact of mold).

This is why mold sampling, especially of airborne spores, is not usually helpful in real estate transactions or rental property compliance. The U.S. Environmental Protection Agency has set no federal limits or thresholds for mold spores in indoor air, and there are no federal standards for acceptable types or quantities of mold.

Significantly, the CDC does not recommend mold testing, and for good reason.

If You Can See or Smell It, Remove It

In most real world scenarios, if visible mold growth is present, testing is redundant. You already have all the information you need: mold is present, and it may be cleaned up. Whether it’s Aspergillus, Cladosporium, or the infamous Stachybotrys chartarum, the remediation approach is the same.

Maryland’s new mold law reflects this scientific and regulatory consensus. It focuses not on lab analysis or complex fungal taxonomy, but on cleaning up reported mold and addressing the moisture problems that cause it. The standard might be: if you see mold or smell musty odors, investigate the moisture source and take corrective action.

When Sampling May Be Useful

That said, surface sampling may have a role in specific, limited situations. For example:

  • Post remediation verification: Surface samples can help confirm whether a previously contaminated area has been adequately cleaned.
  • Litigation or insurance defense: In some cases, sampling may help demonstrate due diligence or provide documentation in a contested claim.
  • High risk tenants: In properties housing tenants with significant mold sensitivities or immune compromise, sampling may support risk management strategies.

But again, these are edge cases, not general best practices for most rental properties.

Mold’s Health Effects may be Real, But Vary Widely

Health effects from mold exposure can range from no symptoms at all to allergic reactions or infections. The 2004 Institute of Medicine report linked indoor mold exposure to respiratory symptoms, asthma aggravation, and hypersensitivity pneumonitis. The World Health Organization further reinforced this in its 2009 Indoor Air Quality Guidelines.

However, health reactions are highly individual. Mold is not a human health hazard. The CDC has likened mold spores to pollen. No sampling method can predict who will become sick or what type of mold might trigger symptoms. The best course remains simple: eliminate the mold and fix the moisture problem.

Legal & Practical Implications for Landlords

While SB 856 does not mandate testing, it does require landlords to address mold reports promptly. This new statutory duty significantly raises the stakes for landlords and property managers. Mold may well grow into fertile ground for tenant complaints and personal injury lawsuits, and now that mold remediation is becoming a regulatory obligation, failure to act could mean regulatory penalties in addition to private liability.

To mitigate this risk, landlords should:

  • Update lease agreements to include mold disclosure and tenant responsibility provisions.
  • Perform regular inspections to identify and address moisture issues before mold grows.
  • Educate policy making public officials about fungal growth and the limitations of possible government regulation.
  • Create a mold response protocol in the absence of sampling requirements.

The Role of the Internet & Public Education

One overlooked aspect of managing mold risk is tenant education, and the Internet is a powerful tool in that effort. Tenants often search online before submitting maintenance requests or taking legal action. Providing tenants with accurate information, perhaps even linking to resources like the CDC’s Mold webpage or the EPA’s Mold Guide, can help set expectations and reduce misunderstandings. SB 856 requires a new Maryland public information website, and stakeholders should participate in the development process.

Artificial intelligence documentation, including timestamped photos, repair logs, and tenant communication records, also serves as critical evidence should a dispute arise, yet another example of why landlords must embrace in the cloud recordkeeping in this AI age.

Final Thoughts

Mold testing is not the magic bullet some claim it is. Maryland’s new law appropriately prioritizes action over analysis, cleanup over classification. However, many question the efficacy, if not the wisdom, of Maryland trying to be the first state to regulate mold in real estate. For landlords, the new regulatory regime under SB 856 requires the immediate adoption of practical, preventive, and legally sound mold practices.

Remember, the goal is not to count spores; it should be to make buildings safe and healthy for those who occupy them.

We’ve blogged before about Maryland’s new mold regulation in Maryland is About to Regulate Mold: But is the Cart Before the Horse?, and we will continue to monitor the implementation of SB 856 as regulations are developed. If you have specific concerns about mold in your property or real estate transaction, we are here to help.

Energy Star: A Quiet Exit and a Bright Future Beyond Government

By Stuart Kaplow on Posted in Codes and Regulations, Energy, Federal

The FY 2026 President’s Budget delivers a clear message, Energy Star, as a federal program, is on its way out. Zero dollars are appropriated for the once innovative joint EPA and Department of Energy initiative, and the EPA’s June Budget in Brief confirms what many had quietly predicted, Energy Star is all but certain to be eliminated.

Today, that federal program has reached its inflection point. The EPA is undergoing a second wave of voluntary resignation offers, and after a May 5, 2025, staff meeting where the director of the Office of Atmospheric Protection informed employees that the office and its associated programs, including Energy Star, would be eliminated, key Energy Star staff reportedly accepted buyouts. With over a 54% reduction in funding and shrinking staff, the agency is no longer positioned to sustain the program.

And yet, the larger story isn’t one of loss, it’s one of opportunity.

The Creation Story

Created in 1992 under President George H.W. Bush, Energy Star was a ‘voluntary’ labeling program conceived to reduce power consumption and promote energy efficient products, the first of which were labels for computers and their peripherals. In 1995 the program was significantly expanded, introducing labels for residential heating and cooling equipment.

Since then, the program transmogrified into a vast government bureaucracy that last year certified over 50,000 products, not to mention swelling into a civil service scoring residential and commercial buildings and more. And most objectionable to many is that the voluntary program has been perverted into a ‘mandatory’ reporting greenhouse gas emission tool in jurisdictions from Maryland to Denver, utilizing Energy Star’s Portfolio Manager.

The Rest of the Story

But the rest of the story is that EPA Administrator Lee Zeldin last week told Congress that Energy Star could be privatized. “This program is an example of one that can be run outside of the government,” Zeldin said at the hearing of the House Energy and Commerce Environment Subcommittee in response to questions from Rep. Darren Soto (D-Fla).

In recent days, Zeldin added, “multiple entities” have reached out to EPA “because they want to take over Energy Star, which is a program that requires a big staff, a big taxpayer-funded staff, and a whole lot of tax dollars.”

Of note, Energy Star was proposed to be sold to a private entity during Trump 45, but only the appliance labelling program was considered saleable, not Portfolio Manager.

Not a Proper Government Function

A just published study by the Competitive Enterprise Institute, “Modernizing the EPA”, articulates clearly that the Energy Star program assumes,

“ .. the federal government needs to meddle in the marketplace by providing its seal of approval on what it deems to be environmentally satisfactory products. If consumers demand certain information, then businesses will respond by disseminating this information to them. If there is a need to create a labeling program to ensure credibility and consumer confidence, then private certification organizations should play such a role.”

The efficacy of focusing on energy costs at time of retail purchase but not at time of design of a product or time of use has been questioned, including by the Cato Institute, “.. the Energy Star label, which only provides a binary signal about the most energy efficient products in the marketplace, is a very coarse piece of energy information that may crowd out efforts to compute more accurate energy operating costs.” Today, over 76% of U.S. households have smart electric meters (that have nothing to do with Energy Star).

Issues of energy efficiency are not lost on the American populous and recent executive orders by the Trump administration rolling back water pressure standards on showerheads, faucets, dishwashers, toilets, and washing machines are incredibly popular with the public.

The Energy Star program has faced controversy and scrutiny over its lack of transparency and vulnerability to fraud. A GAO undercover investigation, some years ago, obtained Energy Star certifications for bogus products, including a gas powered alarm clock.

Misguidedly, more than 1,000 trade associations, environmental groups, and others recently sent a letter to EPA urging support for the Energy Star program. The letter ignores the prospect that the program could continue outside of government, as better owned and operated in the private sector. Operators of LEED, Fitwel, and the WELL Building Standard have led this opposition, including complaining that a shut down would cause them to have to revise their rating systems, but they are just the type of private organizations that could run Energy Star.

Making it Mandatory was the Death Knell

The push to save Energy Star by the environmental industrial complex sidesteps the query of ‘what is a legitimate function of government.’ But the death knell for Energy Star may have been the shift from the original aim of “power saving” to now greenhouse gas emission reduction, and in recent years that state and local governments have overstepped from what was a voluntary program to being as the tool for reporting in BEPS and other climate laws that are preempted by federal statute because they concern the energy use of appliances covered by the federal Energy Policy and Conservation Act and are therefore void and unenforceable. Separately, the U.S. Justice Department has warned local and state regulators that it will take legal action against locals for wrongly enacting measures “aimed to phase out natural gas furnaces and water heaters through measures such as setting zero-emission sales targets and imposing fees on new gas appliances.”

To be clear, the Trump administration’s fiscal year 2026 budget proposes eliminating the EPA’s Atmospheric Protection Program, the program under which Energy Star operates.

Backup for the Future

Our advice to clients and friends is to back up your Energy Star data now! There are private companies already vying to become the private sector default for energy benchmarking, which will do that for free.

The reality is while once innovative, the Energy Star program is today a prime example of a government function that the private sector is not only capable of replicating, but is, in many ways, already doing better.

While the future of Energy Star remains to be seen, hopefully, Congress will not let political science prevail over engineering. The shift to a private benchmarking ecosystem aligns with broader trends toward market solutions and innovation, including the use of artificial intelligence. Rather than mourn the passing of a more than 30 year old government program, this is an opportunity to embrace better tools, greater flexibility, and a more competitive market for energy efficiency.

There is no doubt that Energy Star has done good; however, rather than lament a program that is a prototypical example of government doing something that is not a proper function of government, and that the private sector will do better, embrace privatization that will be a leap forward into a more dynamic, efficient, and innovation rich future.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” this Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Congress Blocks California’s Gasoline Car Ban: A Legal and Policy Analysis

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Federal

The Senate has approved three Congressional Review Act resolutions initiated in the House of Representatives that overturn Environmental Protection Agency waivers, which had effectively imposed a de facto ban on the future sale of gasoline powered cars in California and 17 states, as well as Washington, DC.

Congressional disapproval of California’s electric vehicle mandates is another step toward ending the electric vehicle mandate on all Americans and now awaits President Trump’s signature.

Background: California’s Emissions Standards and EPA Waivers

Under Section 209 of the Clean Air Act, California has, since 1968, been granted waivers by the EPA to implement vehicle emissions standards more rigorous than federal requirements, citing “compelling and extraordinary circumstances” related to air quality. In December 2024, the Biden administration’s EPA granted such waivers, allowing California to proceed with its Advanced Clean Cars II program, aiming to phase out new internal combustion engine vehicle sales by 2035. Several states, including Maryland and Colorado, adopted the same California standards, collectively influencing a significant portion of the U.S. auto market.

The Joint Resolution

The resolution is short and straightforward:

“That Congress disapproves the rule submitted by the Environmental Protection Agency relating to “California State Motor Vehicle and Engine Pollution Control Standards; Advanced Clean Cars II; Waiver of Preemption; Notice of Decision” (90 Fed. Reg. 642 (January 6, 2025)), and such rule shall have no force or effect.”

Congressional Review Act and Legal Controversy

The CRA enables Congress to overturn federal regulations within a specific timeframe. However, its application to these EPA waivers has been contentious. Both the Government Accountability Office and the Senate Parliamentarian opined that the EPA waivers do not constitute “rules” under the CRA and thus are not subject to its provisions.

Interestingly, to mitigate risk of judicial redress based on the Senate’s Parliamentarian’s interpretation, the Senate  set up an elaborate series of procedural votes to allow the Senate to settle the question of what qualifies under the CRA; an action that is typically referred to as the “nuclear option.” Historically used to avoid a filibuster, the nuclear option allows the majority party to use a simple majority vote to overturn a point of order and thus avoid existing procedural constraints. Thus, Republicans avoided a Senate floor confrontation over the Parliamentarian’s interpretation of the CRA by sending the question about what qualifies under the CRA back to the full Senate.

As we blogged about on February 23, 2025, Lee Zeldin, President Trump’s head of the EPA, requested a review of the rule under the CRA. Shortly thereafter, the House voted 246-164 to advance the resolution (H.J.Res.88). The vote largely followed party lines, though 35 Democrats joined Republicans in support of the measure. The Senate then advanced the resolution to President Trump for his signature in a 51-44 vote, also along party lines.

In addition to H.J.Res.88, the Senate passed two related resolutions, H.J.Res 87 and H.J. Res 89, aimed at stopping California from enforcing rules that promote zero emission truck sales and implementing stricter nitrogen oxide limits.

Repeal of Regulations

These three CRAs are among 74 resolutions Republicans in both chambers have introduced that would overturn Biden era climate rules. President Trump has signed seven CRA resolutions into law. Once a CRA resolution is enacted, a federal agency cannot propose a similar rule in the future.

Implications for State Authority and Environmental Policy

The Senate’s action represents a significant shift in the balance of federal and state powers concerning environmental regulation.  This move could set a precedent affecting other areas where states have traditionally exercised autonomy under federal environmental laws.

The implications are huge. Consider, by way of example, a state like Maryland that has enacted statutes that the entire state will be greenhouse gas emission free by 2045, largely on the back of the California gasoline powered car ban; the provisions of that state law will now have no force or effect.

Stakeholders Respond

Proponents of the resolutions argue that California’s mandates could lead to increased vehicle costs and limit consumer choice nationwide. Industry groups, including the National Automobile Dealers Association, supported the Congressional action, citing concerns over market fragmentation and regulatory burdens.

Opponents, including California officials and global warming advocates, contend that the revocation undermines efforts to combat climate change and infringes upon states’ rights. California Attorney General Rob Bonta said the state “intend[s] to sue the Trump administration,” again.

But, significantly and dispositively, the CRA expressly bars judicial review of resolutions.

Conclusion

The Congressional disapproval of California’s EPA waivers marks a pivotal moment in U.S. environmental and energy policy, highlighting tensions between federal authority and initiatives led by a few states. Most expect the legal challenges anticipated in response to this action to fail, leaving this CRA saga to shape the future of environmental regulation and state federal relations in the years to come.

While Otto von Bismarck almost certainly never uttered the words, this may be a good example of, “Laws are like sausages. It is best not to see them being made.”

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

EPA Will Keep Current Limits for “Forever Chemicals” in Drinking Water

By Stuart Kaplow on Posted in Codes and Regulations, Environmental, Federal

On May 14, 2025, Lee Zeldin, the U.S. Environmental Protection Agency Administrator, announced the agency will retain its current National Primary Drinking Water Regulations for two of the most studied per and polyfluoroalkyl substances (PFAS): perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS). With this announcement, the agency provided a roadmap as to its intention to continue protecting public health from these so called “forever chemicals” while introducing new regulatory flexibility aimed at the compliance burden for drinking water systems, particularly small and rural water systems.

While some have mischaracterized this as a roll back from what the Biden Administration had announced, most in the environmental industrial complex have commended the agency for balancing science based health protections with regulatory pragmatism. The EPA’s decision reflects a reprioritized agency commitment to safeguarding drinking water, honoring the rule of law, and targeting the actual sources of PFAS contamination (.. a dramatically different approach to the environment than the prior Administration).

It is important to appreciate that preliminary sampling by EPA found that average PFOA concentrations exceeded the 4 ppt Biden Administration standard in 6% of the water systems and PFOS exceeded the standard in 7.2% of the systems. Significantly, none of the PFAS standards EPA plans to withdraw were exceeded in more than 0.6% of systems.

Those statistics are significant against the backdrop of the peer reviewed 2020 study cited approvingly by the EPA that describes 99.7% of Americans having detectable PFAS in their blood! So, when the horses have left the barn, new regulations after the fact may not only be costly but also ineffective.

Understanding the Legal Landscape

PFAS are a class of synthetic chemicals that have been widely used for decades in industrial applications and consumer products due to their resistance to heat, water, and oil. However, these same properties render them highly persistent in the environment and the human body. Mounting scientific evidence has linked PFOA and PFOS to adverse health effects, prompting regulatory scrutiny.

The Safe Drinking Water Act vests EPA with the authority to establish Maximum Contaminant Levels for contaminants in public water systems. As we blogged about at the time, in April 2024, the agency finalized legally enforceable MCLs for PFOA and PFOS and set a compliance deadline for public water systems by 2029. Administrator Zeldin’s May 2025 announcement confirms those limits will remain unchanged, for now, while additional flexibility will be offered through future rulemaking.

For the cynical, this announcement can be seen as the EPA response to American Water Works Association, et al. v. EPA, a lawsuit challenging the Biden National Primary Drinking Water Regulation for PFAS, arguing that the agency did not follow the required process of the Safe Drinking Water Act in developing the regulation. The case is currently ongoing, with the court granting additional time for EPA to evaluate MCLs for PFAS and the new rules announced will cure the alleged legal defect in the process of the 2024 rules.

Key Takeaways from the EPA’s Announcement

  1. Current Limits for PFOA and PFOS Remain in Place
    EPA is not revising the MCLs for PFOA and PFOS established in 2024. These standards are based on robust scientific risk assessments and remain legally enforceable under the SDWA.
  2. Extended Compliance Timelines
    Acknowledging infrastructure and funding challenges, EPA will propose extending the compliance deadline from 2029 to 2031. This two year extension offers critical breathing room for utilities and private businesses developing treatment plans or undertaking capital projects.
  3. Introduction of PFAS OUTreach Initiative
    EPA will roll out a new PFAS OUT program to assist water systems, especially in underserved communities, with education, technical assistance, and access to federal funding. But expect a cessation of federal funding to states that get ahead of or otherwise out in front of this scenario. This initiative aims to ensure no community is left behind as the regulatory framework evolves.
  4. A Focus on Regulatory Integrity and Legal Process
    The agency will reconsider the regulatory determinations for additional PFAS compounds (PFHxS, PFNA, HFPO-DA/GenX, and PFBS) that were initially bundled under a Hazard Index. This step ensures that future regulations are based on individualized scientific assessments and are legally defensible under the SDWA.
  5. Polluter Accountability
    Importantly, the EPA reaffirms that water systems are passive receivers of contamination and should not bear the financial burden of cleanup. The agency pledges to use enforcement tools, including effluent limitation guidelines and coordination with the Department of Justice, to hold polluters accountable.

Implications for Water Systems and Industry

From a legal and operational standpoint, this announcement delivers a significant win for public water systems and private owners of water systems. By providing additional time for compliance and recognizing the distinct challenges faced by smaller utilities, EPA is demonstrating a regulatory approach that is both firm and fair.

For industry stakeholders and polluters, however, the message is clear: the regulatory noose is tightening. With enforcement mechanisms in place and growing public demand for clean water, companies must take proactive measures to address legacy and ongoing PFAS discharges. Legal counsel should review client operations for potential exposure under the Clean Water Act, RCRA, CERCLA (pending final PFAS designation), and state tort regimes.

Looking Ahead

As environmental regulations around PFAS continue to evolve, water systems, industries, and municipalities must remain vigilant. Key next steps include:

  • Monitoring EPA’s forthcoming rulemaking this fall to extend the compliance deadline to 2031.
  • Engaging with the PFAS OUTreach Initiative for support and funding.
  • Evaluating potential liability exposure under federal and state PFAS and other statutes.
  • Participating with states’ rulemaking to make certain they do not get ahead of the science or the new federal 2031 compliance deadline.

The regulatory terrain for PFAS is dynamic, complex, and politically charged. With bipartisan support and a growing body of scientific evidence, PFAS regulation is coming (.. and it should be). But with clarity, flexibility, and stakeholder engagement, the EPA is signaling that progress can be made without imposing unreasonable burdens on water systems or the stakeholders they serve.

Conclusion

In summary, EPA’s decision to maintain the current limits for PFOA and PFOS while extending compliance deadlines represents a prudent recalibration of the agency’s regulatory approach and the concomitant efforts by states. It affirms public health protections without undermining the operational realities of water utilities. At the same time, the agency’s renewed focus on polluter accountability could lead to significant legal developments in the coming years. Stakeholders would be well advised to prepare.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Court Indefinitely Pauses SEC Climate Rule Litigation

By Stuart Kaplow on Posted in Climate Change, Federal, GHG, greenhouse gas

In a striking development with far reaching implications, the U.S. Court of Appeals for the Eighth Circuit has granted the Motion to Hold Case in Abeyance in the consolidated litigation Iowa v. U.S. Securities and Exchange Commission, the lead challenge to the SEC’s 2024 climate disclosure rules. The court’s April 24, 2025, order halts further proceedings indefinitely, pending further notice, and signals a dramatic shift in the landscape of environmental regulation in the United States.

As an attorney who closely follows the intersection of environmental public policy and sustainable business practices, this moment represents more than just a litigation delay, it is a bellwether for the future of environmental regulation and a telling sign of the current post progressive political climate.

Moreover, this is an example of how difficult it is to eliminate a federal regulation.

The Background: SEC’s Controversial Climate Disclosure Rules

The Securities and Exchange Commission’s 2024 climate disclosure rules required public companies to report climate related financial risks, including Scope 1 (direct) and Scope 2 (indirect, from energy purchases) greenhouse gas emissions, and, in many instances, Scope 3 emissions (from upstream and downstream activities in their value chains).

The rules were hailed by climate change advocates as long overdue measures, but were branded by business as regulatory overreach, particularly burdensome to smaller public companies and those reliant on complex global supply chains. Litigation quickly followed, culminating in the Iowa v. SEC action joined by more than a dozen states.

The SEC Retreats

On February 11, 2025, SEC Acting Chair Mark Uyeda issued a statement saying the rules were “.. deeply flawed and could inflict significant harm on the capital markets and our economy.” We blogged about that he then “.. directed the Commission staff to notify the Court of the changed circumstances and request that the Court not schedule the case for argument to provide time for the Commission to deliberate and determine the appropriate next steps in these cases.”

On March 27, 2025, in a pivotal reversal, the SEC voted to end its defense of the rules. SEC staff sent a letter to the Eighth Circuit stating that the Commission withdraws its defense of the rules and that Commission counsel are no longer authorized to advance the arguments in the brief the Commission had filed. However, the rules were not formally rescinded, nor was the litigation terminated, leaving the fate of the challenged regulations in limbo.

Then, on April 4, 2025, a group of 18 intervening states and the District of Columbia filed a motion requesting the Eighth Circuit to hold the case in abeyance. The state of Iowa, representing the original petitioners challenging the rule, opposed the motion on April 14.

Ten days later, on April 24, the court issued its order: “The motion of the intervenor States to hold these cases in abeyance is granted. The cases will be held in abeyance pending further order of the court. The Securities and Exchange Commission is directed to file within 90 days a status report advising whether the Commission intends to review or reconsider the rules at issue in this case ..”

In short, the rules live on, for now, but the SEC must declare its next steps by July 23, 2025: “If the Commission has determined to take no action, then the status report should address whether the Commission will adhere to the rules if the petitions for review are denied and, if not, why the Commission will not review or reconsider the rules at this time.”

Legal and Policy Implications of the Court’s Order

The decision to pause the litigation places the climate disclosure rule in a regulatory state of suspended animation. The Eighth Circuit did not rule on the merits; it simply halted proceedings, giving the SEC an opportunity to reconsider its position and perhaps, to begin a formal rollback of the rule via the Administrative Procedure Act.

This pause may provide short to mid term relief for regulated companies, but admittedly leaves some prolonged uncertainty:

  • The 2024 rules technically remain on the books.
  • The SEC’s commitment to enforcement is ambiguous and likely variable depending on future political leadership.
  • Future administrations could revive or revise the rules, restarting both the regulatory process and legal challenges.

What Public Companies Should Be Doing Now

Despite the pause, public companies should not interpret this as a green light to ignore climate risks in securities filings. Key points to keep in mind:

  • The SEC’s 2010 Guidance on Climate Change Disclosure remains in force. We regularly remind clients and others that this guidance emphasizes the materiality of climate related risks under existing federal securities law.
  • Acting SEC Chairman Mark T. Uyeda made clear that the Commission will continue to evaluate climate disclosures through a “materiality” lens, meaning any climate related information that a reasonable investor would consider significant must still be disclosed.
  • The SEC is unlikely to issue detailed climate related comment letters, as it did under the Biden Administration, but will remain vigilant for material misstatements and omissions, potentially triggering enforcement actions under existing anti fraud rules.
  • International and state level disclosure obligations still exist, regardless of federal action (.. although implementation dates are being pushed in many instances). For example:
    • California’s SB-253 and SB-261 impose climate risk disclosure and GHG emissions reporting on many large companies doing business in the state.
    • Maryland’s BEPS impose not only disclosure requirements but also mandates that large buildings be net zero by 2040 (causing the state to be an outlier in GHG matters).
    • The EU’s Corporate Sustainability Reporting Directive mandates climate disclosures for many multinationals with operations in Europe.

Companies that ignore climate disclosure obligations entirely do so at their peril. And this is an opportunity for businesses that take geographically specific, overly burdensome regulations into account to thrive.

Shareholder Pressure Is Waning but Not Gone

Interestingly, shareholder activism appears to be declining sharply. In 2025, investors filed 92 environmental and social proposals, down from 206 in the same period in 2024, a >50% drop year over year. Among them, 10 “anti-ESG” proposals were submitted, reflecting a more contentious environment for corporate sustainability discussions.

However, this does not signal a wholesale retreat from environmental concerns. Rather, it reflects growing polarization and shifting strategies on both sides of the ecological debate. The litigation pause may further chill environmental activism in the short term.

Conclusion: The Litigation Is Paused, But the Climate Change Conversation Isn’t

The Eighth Circuit’s decision to indefinitely pause Iowa v. SEC does not mark the end of the climate disclosure rule. It simply delays the inevitable reckoning, whether that be through formal rule rescission, judicial ruling, or revival under a future administration.

For businesses, this is not an opportunity to disengage. Instead, it is an intermission that demands continued attention, preparation, and legal risk management. Climate related risks are not going away, and the scrutiny over how they are disclosed will persist, whether under SEC regulations, state law, or shareholder pressure.

Companies should continue to:

  • Evaluate climate risks under existing materiality standards.
  • Implement and test sustainability related disclosure controls.
  • Monitor international and state level regulatory developments.
  • Prepare to pivot, as the rules, and the political winds, inevitably change.

All of which supports the proposition that it is hard to kill a federal regulation, even a bad regulation like the rules here. We will continue to blog about developments in this case and advise clients as the July 23, 2025, SEC status report deadline approaches.

_________________________

Join us for the next in our “carbon based life form” webinar series, “Maryland BEPS Update for Building Owners” on Tuesday, June 10 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

LexBlog