Green Building Law Update

The Intersection of Real Estate, Science, and Law

A More Efficacious Way to Measure Greenhouse Gas Emissions

As an environmental attorney who spends much of my time advising business owners, I have learned an immutable truth: markets work best when the rules are clear, fair, and grounded in reality. Environmental policy is no exception. Contrary to the prevailing narrative in popular media, the global business community has not uniformly shifted away from efforts to reduce greenhouse gas emissions, and now there is a better way to track those emissions.

Bad metrics lead to bad incentives. Good metrics unlock innovation, competition, and capital. That is why the emergence of Carbon Measures, a global coalition of major businesses committed to a more accurate emissions accounting framework, deserves close attention from the business community.

Carbon Measures is calling for a new way to track greenhouse gas emissions, one that moves beyond abstract projections and toward verifiable, product level accounting in E- ledgers. The premise is straightforward but powerful: if businesses are rewarded in the marketplace for producing lower carbon products, they will invest in the technologies and processes that make those products possible. Markets, not mandates alone, can then do much of the heavy lifting.

Why the Current System Isn’t Working

The world has not monolithically pivoted away from emissions reduction. Quite the opposite. In 2026, however, emissions tracking has become a bifurcated landscape. In the United States, the federal government has dismantled or deemphasized national GHG tracking programs, relieving many businesses of what they viewed as bureaucratic and stigmatizing compliance obligations. At the same time, mandatory carbon reporting is now a strict corporate necessity for many companies operating in the European Union, California, Maryland, and other places.

Yet across the globe, there is broad agreement on one point: the current Scope 1, 2, and 3 reporting regime is not workable, particularly when it comes to Scope 3. Scope 1 (direct emissions) and Scope 2 (purchased energy) are relatively straightforward, but modest in impact. Scope 3, covering upstream (purchased goods) and downstream (use of sold products) value chain emissions and often representing up to 90% of a company’s reported footprint, is another matter entirely.

Scope 3 reporting frequently relies on guesstimations, assumptions, and generalized emissions projections that have little, if any, connection to operational reality (nothing is actually being counted). Business leaders, legal experts, and scientists alike have come to question the utility of such data. To be blunt, asking a company to precisely account for the emissions of its customers and customers’ customers is, at best, immensely challenging and, at worst, a compliance exercise untethered from meaningful emissions reduction.

The dominant methodology, the GHG Protocol, developed by the World Resources Institute decades ago (the same year Pac-Man was released in arcades), is widely used, perhaps because the problem is hard and alternatives have been scarce. But it has also been criticized for misallocating responsibility and encouraging double counting. As Exxon CEO Darren Woods, a founding member of Carbon Measures, aptly put it: holding a supplier accountable for Scope 3 emissions is “like holding McDonald’s responsible for the weight of its customers.” The calories matter, but accountability has limits. “We don’t tell McDonald’s that they can’t sell a hamburger to somebody who has a weight problem,” said Woods.

Enter Carbon Measures: A Business Led Solution

If carbon is going to be reduced, we need a better system. Carbon Measures represents an effort by businesses to propose one. Its membership includes leading companies from diverse industries and geographies, many operating large, complex supply chains. That matters because the industrial sector accounts for a significant share of global emissions and must play a central role in decarbonization.

At its core, Carbon Measures advocates for ledger based, product level carbon accounting, rooted in the same principles that govern financial accounting, now on an artificial intelligence framework. Instead of enterprise level disclosures that blur responsibility, this “cradle to gate” approach tracks emissions where they are generated and assigns them to the products being made.

Just as financial accounting requires that an asset or liability be held by only one entity at a time, a sound carbon accounting framework ensures that each tonne of carbon is counted once, accurately, and attributed to the right place. An artificial intelligence carbon e-ledger enables companies and suppliers to calculate and transfer emissions data at each step of a product’s lifecycle.

Consider a car. The emissions associated with producing and transporting each component are transferred into the emissions value of the finished vehicle. The result is a complete, nonduplicative carbon profile for that product; no gaps, no double counting.

E-ledgers Carbon Accounting is the creation of Robert S. Kaplan, Harvard Business School and Karthik Ramanna, University of Oxford.

From Accounting to Artificial Intelligence

Carbon Measures’ work goes beyond reporting. The initiative envisions product level carbon intensity standards, such as CO₂ per ton of steel or per watt of electricity. These standards are intended to be voluntary, but they have real market force. Purchasers can compare products based on carbon intensity, rewarding lower carbon options. Governments can “put their finger on the scale” by applying stricter standards in public procurement.

Over time, as technology improves, allowable emissions per unit can decline systematically, driving real reductions while still meeting demand. This approach levels the playing field, rewards innovation, and ensures that progress is measurable.

The framework itself will be developed by an independent Technical Expert Panel, co-launched with the International Chamber of Commerce. Drawing on expertise from academia, industry, financial accounting, engineering, and civil society, the AI rooted work will focus on scientific rigor and real world feasibility.

Coexisting With Existing Reporting Regimes

Critics argue that introducing any new framework risks confusion. But in practice, multiple methodologies already exist. Maryland, for example, does not rely on the GHG Protocol for its statutory “Net Direct” GHG measure. Carbon Measures is not proposing to abolish Scope 3 reporting overnight. Scope 3 may continue to play a role in voluntary disclosure, even as companies adopt ledger based product accounting for operational and market purposes.

Ultimately, a gate to gate, ledger based system can account for emissions across the full value chain, without the indeterminacy and multiple counting that plague current approaches.

What About Cost and Affordability?

Business owners rightly ask how this will affect pricing, particularly for energy and other essentials. Affordability is critical. Many lower carbon solutions cost more today. But costs decline as technology advances and markets scale. What markets need is a way to quantify both emissions and costs accurately, so capital flows to the lowest cost transition pathways.

That is what Carbon Measures seeks to enable.

As an environmental attorney, I see this initiative as a pragmatic, market aligned evolution from the current 1980 era carbon guesstimating method to a new and improved AI rooted climate policy. Better measurement will not solve climate change by itself, but without better measurement, we will continue to misallocate effort, capital, and accountability.

We will continue to write about Carbon Measures and other innovations in environmental matters.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Everything You Always Wanted to Know about Environmental Law (But Were Afraid to Ask)” on Tues, Feb 17 at 9 am. The webinar is complimentary, but you must register here.

United States Sues Morgan Hill and Petaluma over All Electric Building Laws

By Stuart Kaplow on January 25, 2026 Posted in Codes and Regulations, Energy, Federal

On January 5, 2026, the U.S. Department of Justice filed a lawsuit against the cities of Morgan Hill (Santa Clara County) and Petaluma (Sonoma County), California, challenging local ordinances that effectively ban natural gas infrastructure and gas powered appliances in new buildings. The complaint, docketed as Case 5:26-cv-00056 in the U.S. District Court for the Northern District of California, frames the dispute as a clash between local climate policy initiatives and longstanding federal energy law.

This case concerns the prevailing national consensus that the country’s long term prosperity should be advanced through ever our increasing sustainable technology and amazing economic abundance, rather than by prohibiting the use of lawful energy sources by banning fossil fuels.

That the plaintiff is the United States government should be considered as of import.

What the Lawsuit Is About

Both cities adopted their respective all electric building rules, Morgan Hill in 2019 and Petaluma in 2021, as part of broader efforts to reduce greenhouse gas emissions and transition building energy systems away from fossil fuels. These ordinances limit or prohibit the installation of natural gas piping and appliances like gas stoves, furnaces, and water heaters in most new construction.

The DOJ’s complaint asserts that these local bans violate the Energy Policy and Conservation Act of 1975, a federal statute that empowers the U.S. government to establish national energy conservation and efficiency standards for covered products and expressly preempts state and local regulations “concerning the energy use” of those products. EPCA’s preemption provision was interpreted by the Ninth Circuit in California Restaurant Association v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), to apply to local restrictions that ban or effectively eliminate the use of natural gas for covered appliances by prohibiting the necessary infrastructure. We have blogged about that case and the Broad Failure in Attempts to Ban Natural Gas.

According to the DOJ complaint, the Morgan Hill and Petaluma ordinances fall squarely within this preemptive scope because they “concern the .. energy use” of covered products by preventing natural gas from serving as an energy source, a result the Ninth Circuit found preempted when Berkeley’s ordinance was challenged.

The complaint also alleges that the bans impose what it describes as “crushing costs” on residents and businesses, framing the local rules as detrimental to consumer choice and inconsistent with a unified federal approach to energy regulation, not to mention flying in the face of increasing electricity demand that will only be made more dire with mandates for more electricity usage.

DOJ’s Legal and Policy Argument

The Department of Justice contends that Morgan Hill’s and Petaluma’s prohibitions create a patchwork of inconsistent regulation in an area where federal law mandates uniform national standards for energy related products. Under the EPCA’s express preemption clause, once a federal standard covering an energy using product becomes effective, no state or local regulation “concerning the energy use” of that product may remain effective unless it falls within specified exceptions, none of which the DOJ argues applies here.

The DOJ’s legal strategy in this case explicitly draws on the Berkeley precedent, where the Ninth Circuit held that EPCA preempts a local ban on natural gas piping to new buildings because the ordinance, regardless of form, regulated the energy use of natural gas appliances.

Beyond legal doctrine, the lawsuit reflects the federal energy policy emphasis articulated by the current Attorney General, Pamela Bondi, who in press statements, characterized the bans as unlawful and harmful to the nation and to consumers. DOJ officials have tied the action to broader federal objectives articulated in two Executive Orders Unleashing American Energy (EO 14154) and Protecting American Energy from State Overreach (EO 14260), which prioritize American energy dominance and seek to challenge state and local actions deemed to undermine that priority.

DOJ’s complaint seeks a judgment declaring the ordinances preempted, invalidating them, and securing permanent relief preventing their enforcement.

Context and Background

Both Morgan Hill and Petaluma adopted their all electric codes in a bygone era when many local governments in California were exploring aggressive policies to reduce building emissions (.. how a Presidential election changes national energy policy). These ordinances were joined by similar actions in cities such as Berkeley, which became the first jurisdiction to enact a strict natural gas ban, later struck down by the Ninth Circuit and repealed.)

Following the Berkeley decision, numerous governments across the country, including Los Angeles and other California cities, recognizing the legal challenge posed by EPCA, have repealed or suspended similar ordinances.

Morgan Hill and Petaluma reportedly have not actively enforced their bans since the Berkeley ruling, and the DOJ’s lawsuit signals a proactive federal approach to asserting EPCA preemption and deterring future local ordinances of similar character.

Today the emphasis nationwide is reliability of the electric power grid and the generation of enough electricity to meet growing needs (.. nearly the opposite emphasis of these climate concerned laws).

Potential Impact

For business leaders and policymakers outside California, particularly in jurisdictions like Maryland, the implications of this litigation are significant. Governments nationwide, including Maryland and Montgomery County, Maryland, have adopted laws aimed at phasing out fossil fuels in favor of all electric buildings. Unlike the ordinances at issue here that impact new construction, the Maryland laws extend to retrofitting existing buildings, a much broader regulatory scope that arguably raises even more complex preemption issues and has prompted litigation asserting similar conflicts with federal law.

If the federal court in Northern California follows the Ninth Circuit’s reasoning and grants the DOJ’s requested relief, the decision could deter other governments from adopting or enforcing bans on natural gas infrastructure and appliances. Legal analysts and environmental attorneys widely expect that the federal government’s position, supported by Berkeley precedent, will prevail, reinforcing the principle that energy conservation and energy use standards for covered products are matters of national, not local, regulatory authority.

This case may thus become a legal bellwether for future disputes over the balance between local climate objectives and federal statutory preemption.

It will also be a predictor of the national will for maximizing a great future for civilization through sustainable technology and amazing abundance addressing the reality of electricity demand of data centers and affordability of electricity, not being anti innovation and banning fossil fuels.

Business executives with interests in construction, real estate development, utility infrastructure, and energy policy should closely monitor developments, as similar legal frameworks are being considered nationwide, including, by way of example, the Department of Justice intervening in the cases challenging the Maryland all electric building laws. Watch future posts on this blog for updates as the litigation unfolds.

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WARNING: This Product Contains an Ingredient Not Recommended for Human Consumption …

By Stuart Kaplow on January 18, 2026 Posted in Codes and Regulations, Environmental, State

Businesses across the country face a consequential legal and commercial crossroads as Texas Senate Bill 25, branded the Make Texas Healthy Again Act, thrusts state level food labeling regulation into uncharted constitutional and regulatory territory. The stakes are high: companies that manufacture, market, or sell food products may soon confront unprecedented warning requirements that could upend longstanding federal standards and expose them to severe penalties.

What the Texas Law Will Require

Under Section 9 of the Act, any packaged food product sold in Texas that contains one or more of 44 listed ingredients must bear this statement on its label:

“WARNING: This product contains an ingredient that is not recommended for human consumption by the appropriate authority in Australia, Canada, the European Union, or the United Kingdom.”

This requirement applies to food labels developed or copyrighted on or after January 1, 2027, and carries the threat of civil penalties up to $50,000 per day per product and potential criminal sanctions for noncompliance. Such sweeping label mandates would apply even if products comply with federal labeling requirements under the Federal Food, Drug, and Cosmetic Actand related federal standards.

To many in the food and beverage sector, the text of the warning itself raises concerns: it purports to tie regulatory judgments to foreign jurisdictions’ rules where no such blanket “not recommended for human consumption” classification exists for many of the listed substances. Plaintiffs in the ensuing litigation argue this renders the warning inaccurate and misleading, a point we return to below.

But key to others is that as a Make America Healthy Again (MAHA) inspired law, it champions a regulatory shift that emphasizes strict ingredient disclosure and transparency rather than any banning of products or specific additives.

The 44 Ingredients Subject to the Warning Requirement

Based upon information in the legislative history file, ingredients include: Acetylated esters of mono- and diglycerides (acetic acid ester), Anisole, Azodicarbonamide (ADA), Butylated hydroxyanisole (BHA), Bleached flour, Blue 1 dye, and more ..

The Federal Court Challenge: First Amendment at the Forefront

On December 5, 2025, four food industry associations filed a federal lawsuit, American Beverage Association et al. v. Paxton, seeking to invalidate Section 9 on multiple constitutional and statutory grounds.

Central to the complaint is the contention that the required warning constitutes an unconstitutional compelled speech requirement under the First Amendment. The associations argue that Texas is forcing businesses to disseminate a government scripted message that is content based and misleading, without any actual factual determination by a U.S. regulatory authority like the FDA. They are heard to complain the cited authority is foreign regulatory policy not U.S. science nor U.S. law, but would science in Boston be better that from Brussels?

On December 12, 2025, the associations moved for a preliminary injunction to halt enforcement of the warning label requirements while litigation proceeds, citing irreparable harm from forced speech and the operational costs of redesigning packaging and websites to comply with the statute.

Federal Preemption and Vagueness

Beyond First Amendment challenges, the lawsuit asserts that Section 9 is preempted by federal food labeling law. Federal law already mandates specific ingredient disclosures and governs the content of food labels to achieve nationwide uniformity. Plaintiffs argue that Texas’s add on warning disrupts this uniform scheme and creates confusion over which standards govern labeling in interstate commerce.

Further, the complaint claims Texas’s language is unconstitutionally vague because it fails to delineate clearly when federal preemption applies and provides no workable framework for companies to determine whether a given product falls under the statute or existing federal requirements.

Commerce Clause Implications

The plaintiffs also assert that Section 9 violates the dormant Commerce Clause by forcing national or regional food producers to alter labels or formulations on a nationwide basis to avoid a patchwork of state laws. This is a familiar concern for businesses operating across state lines: a label requirement that applies only in Texas may effectively dictate manufacturing and marketing decisions elsewhere due to the economic impracticality of producing separate SKU variants.

Amicus Support and Broader Significance

The legal challenge has attracted support from the U.S. Chamber of Commerce, Pacific Legal Foundation, and Goldwater Institute, amplifying the case’s potential implications for commercial speech doctrine, federal preemption, and the limits of state authority in regulating food labeling.

What is Next

Why should business leaders outside the food sector care? Because this is not just about ingredients, it is about regulatory strategy. The Make Texas Healthy Again Act is explicitly aligned with the broader “Make America Healthy Again” movement, which a recent YouGov poll found that among those aware of MAHA, large majorities (72% to 78%) felt MAHA’s values on food, medicine, and agriculture reflected their own. A similar bill has already been drafted for introduction in the 2026 Maryland legislative session. Other states will follow, each adding its own variations and political gloss.

This Texas warning label law represents a pivotal collision of state regulatory ambition with entrenched federal authority and constitutional protections. For business leaders, this moment demands close legal and strategic attention: from First Amendment principles to federal preemption, the outcomes of these early challenges will resonate well beyond Texas, potentially shaping how and where food ingredients and other matters are disclosed to consumers in the United States.

Despite all of that, at this time of value alignment, including health policy views, because this MAHA inspired law involves ingredient disclosure and transparency rather than outright banning products or specific additives, it is widely popular and will likely survive judicial challenges.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Everything You Always Wanted to Know about Environmental Law (But Were Afraid to Ask)” on Tues, Feb 17 at 9 am. The webinar is complimentary, but you must register here.

Microplastics – The Next Environmental Crisis We Can No Longer Ignore

By Stuart Kaplow on January 11, 2026 Posted in Environmental

For decades, environmental law has been built around visible harms: smokestacks, discharge pipes, landfills, and oil spills. We regulate what we can see. Microplastics represent the opposite problem, an environmental threat that is largely invisible, already ubiquitous, and increasingly understood to be biologically active. In many contemporary risk assessments, microplastics now rank among the top emerging environmental threats. That alone should command attention. The science behind it makes inattention indefensible.

Microplastics are generally defined as plastic fragments smaller than five millimeters. Some are intentionally manufactured at that size, microbeads, industrial pellets known as nurdles, and plastic glitter. Others are “secondary” microplastics, the inevitable byproduct of larger plastic items breaking down through sunlight, abrasion, and weathering: packaging, bottles, synthetic textiles, tires, fishing gear, and even disposable masks. Smaller still are nanoplastics, which are measured in billionths of a meter and are correspondingly harder to detect and study.

Exactly how much plastic humans have manufactured so far is not known. But scientists have guesstimated more than 18 trillion pounds, more than two times the weight of all living animals on the planet.

What makes microplastics different from earlier pollution problems is not merely their scale, but their reach. They are now found across land, sea, and air. They pass through water treatment systems. They travel in the atmosphere and fall back to earth in what some have aptly called “plastic rain,” a modern analogue to acid rain, but far more persistent. Sampling in national parks and protected areas in the American West found microplastics in roughly 98 percent of air and rain samples. Even these numbers likely understate the problem, because current methods cannot reliably count clear or white particles and fibers.

They are also in us. Microplastics have been detected in human blood, lungs, liver, joints, placentas, and brains. Estimates suggest that people may inhale tens of thousands of microplastic particles per day. The full health implications are not yet known, but the direction of the evidence is profound. Recent studies associate micro and nanoplastics with inflammation, cardiovascular disease, and increased risk of heart attack and stroke. Research has found higher concentrations of microplastics in placentas from premature births, raising concerns about fetal development and hormone disruption. Animal studies have shown microplastics moving through the brain and blocking blood vessels. Other work suggests a link to cognitive decline. While no responsible scientist will claim the case is closed, it is increasingly clear that we are running a large, uncontrolled experiment on ourselves.

The food chain provides another route of exposure. Microplastics have been found in seafood at astonishing rates, as well as in honey, tea, sugar, fruits, and vegetables. They enter farmland through sewage sludge used as fertilizer and then wash into waterways through runoff. In the ocean, they are ingested by organisms from plankton to shellfish to fish. The phrase “if you eat mussels, you eat microplastics” is not rhetoric; it is a literal description of current conditions (a study last year in Oregon found microplastics in 98.9% of seafood sampled).

There will be no putting this particular genie back in the plastic bottle.

From a legal and policy perspective, the problem is that we have designed our environmental control systems to capture large, visible waste streams. We do a decent job intercepting bottles and bags. We do almost nothing about fibers, fragments, and particles measured in microns. Two recent studies indicate that conventional American style stormwater systems actually accelerate the delivery of microplastics into water bodies. We celebrate devices like Baltimore’s Mr. Trash Wheel, and rightly so, but they are designed to catch what floats. The real problem is increasingly what cannot be seen.

There are some promising technological ideas: experimental filtration systems, magnetic extraction techniques, even robotic collectors (.. Sichuan University has developed a tiny robot fish that can collect microplastics). But these are, at best, partial measures. Once plastic has fragmented to this scale, there is no practical way to “clean up” the environment. The defining feature of plastic, its durability, is precisely what makes it so dangerous when it becomes pollution. Plastic never truly goes away; it just becomes smaller, more mobile, and more biologically available.

Compounding the problem is scale. Global plastic waste is projected to grow dramatically over the next decade, from 250 million tons a year to 460 million tons by 2030, driven by rising consumption. More plastic inevitably means more microplastics. Even bans that make sense, such as the U.S. ban on microbeads in cosmetics, illustrate the limits of single sector regulation. Researchers now find microbead like particles in remote areas and suspect industrial paints and coatings as a source. If that is correct, one industry’s solution simply becomes another’s problem, and in a global atmosphere, national bans have obvious limits.

From an environmental law perspective, microplastics expose a regulatory gap. They do not fit neatly into existing categories of air pollution, water pollution, or waste. They are all of those at once. They are a product, a byproduct, and a contaminant. They are emitted diffusely, transported globally, and persist indefinitely. That combination should sound familiar to anyone who has studied earlier failures to control substances like lead, PCBs, or PFAS, only this time, the volume is orders of magnitude larger.

We are, in all likelihood, in the lull before the storm. The science is moving quickly, and the early signals are not reassuring. What is needed now is not just more research, though we certainly need that, but a serious policy shift toward source control: product design, materials substitution, filtration at home clothing washing machines and municipal treatment plants, and a hard look at how much single use plastic we are willing to accept as the price of convenience.

“I Have One Word for You: Plastics.” This quote from the 1960s film, “The Graduate,” is a perfect encapsulation of the times, then and now.

Today, microplastics are no longer just a scientific or environmental concern; they are rapidly becoming a MAHA (Make America Healthy Again) political issue, and for understandable reasons. At its core, MAHA is about reframing environmental and regulatory policy around human health outcomes, not just abstract ecological protection. Microplastics fit that narrative almost perfectly. Unlike many traditional pollutants, this is not a distant or theoretical risk. The evidence now shows that microplastics and nanoplastics are inside all of us. That transforms plastic pollution from a “save the whales” issue into a direct personal health exposure issue, which is exactly the kind of framing that drives MAHA style politics.

And for a legal profession that exists to anticipate and mitigate risk, microplastics should already be treated as the next major environmental and public health challenge. The legal question is not whether microplastics will become a central environmental issue, but how quickly our laws, policies, and business practices adapt to confront a pollutant that is everywhere, forever, and increasingly inside us.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Exposomics is the Environmental Issue Your Business Should Take Seriously” on Tues, Jan 20 at 9 am. The webinar is complimentary, but you must register here.

Why Electricity Will Be the Number One Environmental Issue of 2026

By Stuart Kaplow on January 4, 2026 Posted in Energy, Environmental, Solar Panel, wind turbine

As environmental attorneys, we spend much of our time advising clients on regulatory risk, compliance, and strategic opportunities. Increasingly, those conversations converge on a single issue: energy, specifically electricity. Looking ahead to 2026, electricity is shaping up to be not only the defining environmental issue but also one of the most consequential economic and geopolitical matters of the year.

Importantly, this is not a pessimistic observation. It is an opportunity for prosperity while at the same time improving the human condition, if approached with realism, balance, and a renewed commitment to reliability.

Energy Demand is Accelerating

At its core, 2026 represents an inflection point. Energy demand is accelerating rapidly, the infrastructure required to support that demand is lagging, and the desire to transition to cleaner sources remains tepid and constrained. All of these forces are colliding at once. How policymakers, utilities, and businesses respond will define environmental outcomes for years to come.

The underlying driver is scarcity. For decades, the U.S. energy sector has been operated by mandated government monopolies in an environment of relatively flat demand growth. Planning horizons were conservative, permitting timelines were long, and incremental change was the norm. That world no longer exists. The exponential growth of artificial intelligence and data centers, coupled with dramatic demand from enhanced HVAC and increased intake of fresh air, has fundamentally altered the demand curve. Electricity supply has not kept pace and cannot do so quickly under the current regulatory and permitting frameworks.

For the climate focused among us, this matters enormously. The production and consumption of energy, especially electricity, remain the single largest source of global greenhouse gas emissions. For those who view climate change as the paramount environmental issue, electricity generation sits at the center of the problem and, therefore, the solution. Reducing emissions without addressing how we generate, transmit, and consume power is not plausible.

All of the Above

At the same time, it is impossible to ignore a major trend heading into 2026: the stifled and substantially slowed growth of renewable energy. Solar and to a lesser extent wind remain components of a cleaner energy future, but supply chain constraints, interconnection backlogs, land use conflicts, local opposition, and more have slowed deployment, not to mention that the economies of renewable energy only work with government subsidies. This reality does not undermine the role of renewables; it underscores the need for a diversified, “all of the above” resilient energy portfolio that prioritizes reliability and affordability alongside emissions reduction.

Maryland is an Energy Desert

Nowhere are these tensions more apparent than in Maryland. The state is, quite simply, an energy desert, and the situation is deteriorating. Maryland consistently imports more than 40 percent of its electricity from neighboring states, and that reliance is growing. State government forced coal and gas plant closures, economic shifts, and aggressive environmental legislative mandates have reduced in state generation while mandating all electric buildings, a Clean Heat standard, and a Zero Emissions Heating Equipment standard, and the like, at a time when electricity demand continues to rise across the broader PJM region.

This dependence on imported power has real negative consequences. It exposes Maryland consumers to higher electricity prices, including those who can least afford to subsidize bad political decisions, transmission bottlenecks, and increased risk of grid instability. Infrastructure investments to move power across state lines are costly, and those costs are borne by ratepayers. Reliability concerns are not hypothetical; capacity shortfalls, brownouts, and blackout risks are increasingly part of serious planning discussions at PJM and expected to begin in earnest in summer 2026. The state’s planning relies almost exclusively on one new energy source that is not going to happen, as we blogged, Offshore Wind Projects are Now ‘Really’ Dead.

The Most Expensive Utilities in the Country

It is also critical to distinguish between the cost of electricity and the reliability of electricity. Maryland’s electricity rates tell a cautionary tale. In 1972, the U.S. EIA reported the state ranked among the half dozen least expensive states for energy in the nation. Today, according to Doxo, utilities in Maryland are the most expensive in the country. While these issues are related, they are not identical.

Constellation Energy data is instructive. Since 2010, energy related price increases in Maryland have been driven overwhelmingly by transmission costs, not generation costs. Transmission costs in the PJM region have increased more than 300 percent over 15 years, while power generation costs in Maryland have remained essentially flat and have even declined slightly. A significant driver of these transmission costs is state regulation, most notably, according to Constellation is the Building Energy Performance Standard, which is accelerating the electrification and move to net zero large buildings without any commensurate expansion in local generation or transmission. Testimony at a recent hearing included that “Maryland is among the last jurisdictions that has not retreated from what is now recognized as impossible to reach net zero emissions.”

Most ratepayers, not just in Maryland, but across the country, are paying more for electricity this January than they did one year ago. Data centers appear to be getting much of the blame in the mass media, but they are not yet the energy hog they are made out to be and they are not part of the equation in Maryland despite plans for multiple data centers elsewhere in the PJM territory.

The subject of much dinosaur media attention last week, Bjorn Lomborg of the Copenhagen Consensus, cited data from 70 countries and multiple U.S. states from New York to Texas, concluding “the evidence is clear: Adding more solar and wind to the energy supply pushes up the price of electricity.”

Reliable Electricity

Energy security compounds these challenges. Reliable, affordable electricity is no longer just a local issue; it is a geopolitical one necessary to improve the human condition of the poorest among us. States and nations alike are reassessing vulnerabilities exposed by supply constraints and geopolitical tensions. In Maryland, this has led to extraordinary outcomes: the state’s largest government electricity user halting workforce expansion despite constructing its own generation, and the largest private sector user is constructing generating facilities for self supply. These are not signs of a healthy, resilient grid.

Against this backdrop, symbolic government gestures and litigation driven strategies offer little practical benefit. Announcements of accepting dark money to study potential climate litigation against energy suppliers may satisfy certain constituencies, but they do not produce electrons. They do not stabilize the grid. They do not lower rates.

Occam’s razor is instructive here. When faced with competing explanations, the simplest solution is often the correct one. Maryland and the nation (.. and for that matter the globe) need to generate more electricity. Cleanly, reliably, and at scale. That means permitting reform, pragmatic policy, and an honest assessment of trade offs. It means embracing innovation while acknowledging engineering and economic realities.

The solution in Maryland is not Luddite local laws, like Bill 54-24, enacted in Baltimore County, which restricts data centers in the name of conservation of electricity.

Closely associated with this issue, and with reliability, we blogged earlier this year about Battery Storage: The New “Must Have” Amenity in Commercial Leases. Beyond only emergency backup, battery energy storage systems improve day to day operational stability. If the one word advice in the 1967 film The Graduate was “plastics,” the one word advice in 2026 may be “batteries.” But today’s batteries, which have their own negative externalities, will only take us so far.

Beyond 2026

Thinking bigger and beyond 2026, it should be lost on no one that Bitcoin is based on energy. Energy is becoming the true currency. Or stated otherwise, power generation is going to be the de facto currency.

That may be a future view, but it will start in the short term, maybe within 3 years, with solar powered AI satellites.

Energy, especially electricity, will define environmental law and policy in 2026. If approached constructively, it will portend a more prosperous and more resilient era. The challenge is not whether electricity will be the central issue; it already is. The question is whether we will meet that challenge with seriousness, balance, and the resolve to keep the lights on while building a reliable, affordable, and sustainable future for all of us.

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2025 Year in Review of Environmental Blog Posts

By Stuart Kaplow on December 28, 2025 Posted in Climate Change, Energy, Environmental, greenwashing, Legal, wind turbine

As 2025 draws to a close, environmental law once again proved to be less about ideology and more about adaptation.

The environmental issues that resonated most this year, from political, cultural to economic, reflected in our Top 10 most read blog posts, were those that sat squarely at the intersection of regulation, innovation, and market opportunity, acknowledging that “sometimes I am a conspiracy theorist, but I only believe in conspiracy theories that are true,” quoting Vice President J.D. Vance.

Framed in a David Letterman style countdown, this retrospective highlights an amazing year shaped by technological acceleration, litigation risk, and a new Presidential administration that rewarded businesses and policymakers who prioritized flexibility, embraced market based solutions, and treated environmental change as a competitive advantage rather than a compliance burden.

Yes, the U.S. Mint stopped production of the penny this past November, after 232 years, but given that pennies have, since 1982, been mostly zinc with a thin copper plating, economic chaos is not expected, although there is much else to obsess over from this unpredictable year.

Top 10 List of Blog Posts

As we prepare for 2026, let’s revisit the blog posts that defined environmental change in 2025:

10. Stablecoin to Access Capital to Accelerate Green Building Market Transformation

9. Battery Storage: The New “Must Have” Amenity in Commercial Leases

8. Federal Bank Regulators Withdraw Climate Mandates

7. EPA Moves to Overturn California’s Motor Vehicle Emission Standards

6. Maryland Should Allow Off Grid Electricity Providers, as Should the Whole Country

5. Greenwashing Lawsuits Surge in 2025: Navigating the Expanding Risk

4. Offshore Wind Projects are Now ‘Really’ Dead

3. Mold Testing in Maryland Real Estate under the New Law

2. Mandatory GHG Disclosures in Maryland Real Estate Contracts

1. From Boilerplate to Benchmarking: The New Era of Climate Smart Leases

Two Bonus Blog Posts

While not among the Top 10 most read by our blog readers, I commend to your reading:

11. Exposomics Is the Environmental Issue Business Should Take Seriously

12. Potable Water Bankruptcy as Environmental Crisis

Awaiting Us in 2026

Year end retrospectives often look backward, but environmental law has never been a backward looking discipline. As 2025 closes, our most read blog posts tell a story about where environmental policy is heading, not where it has been.

Unsurprisingly, our readers gravitated toward content focused on innovation, market driven solutions, and the disruption of traditional public policy approaches.

The common thread is telling. In a year shaped by a new U.S. President, evolving technologies, and persistent regulatory friction, our most read posts consistently favored innovation, rapid adaptation, and market based solutions over incremental change. In short, they reflect an audience focused less on preserving the status quo and more on reshaping it for a profit.

Next week’s blog will dive into what we are confident will be “the” defining environmental issue and opportunity of 2026 (.. and no, we are not going to write about the emergence of Artificial General Intelligence). Until then, thank you for being part of our journey this year! If you are not currently a subscriber, please visit www.greenbuildinglawupdate.com to subscribe and receive email notifications of our weekly posts.

Wishing you a successful and prosperous New Year!

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Extended Producer Responsibility – A Rapidly Changing Environmental Landscape in Maryland and Elsewhere

By Stuart Kaplow on December 21, 2025 Posted in Codes and Regulations, recycling

Extended Producer Responsibility laws, often referred to simply as EPR, represent one of the most consequential shifts in U.S. environmental policy affecting businesses from manufacturers and multi family residential building owners to distributors and retailers. These laws fundamentally change who pays for, manages, and is accountable for the end of life of consumer product packaging, paper, e-waste, and paint.

EPR has its origins in a 1990 academic paper penned at Lund University in Sweden by Thomas Lindquist.

For businesses, it is no longer an academic public policy debate; it is an immediate compliance obligation with real financial, operational, and reputational consequences. This is where we, as experienced environmental counsel, can play a critical role.

What EPR Laws Require and Why They Matter to Business

Producer Responsibility Laws shift the financial and operational burden of managing products at the end of their useful life away from end users (.. for example, an accounting firm that pays to have its dumpster collected where the trash hauler then pays to dispose of the solid waste in a landfill), or sometimes municipalities that accept waste (.. often residential trash) without tipping fees, and onto the companies that place those products into the stream of commerce.

In practice, EPR laws typically require producers to:

Register with states or a designated Producer Responsibility Organization (PRO)
Report detailed data on materials placed on the market
Pay fees that fund recycling, collection, education, and infrastructure
Meet performance standards tied to recycling or reuse outcomes

The stated policy objective is counterintuitive; that is, when producers of products bear the cost of waste management they have an incentive to design products and packaging that are easier to recycle, less toxic, and more efficient; as opposed to packaging that best protects the product in the stream of commerce, today often involving overnight delivery to the end user, ceding control to single large monopolistic stewardship organization (.. Maryland selected Circular Action Alliance as the single nonprofit PRO in the state), including hindering innovation and reuse. The loftier social engineering goal is the creation of a circular economy in which materials are reused rather than discarded.

From a legal and business perspective, however, EPR creates a complex, state by state (among progressive states) checkerboard compliance matrix. California, Colorado, Maine, Maryland, Minnesota, Oregon, and Washington have all enacted packaging EPR laws, each with its own definitions, thresholds, reporting timelines, and enforcement mechanisms. California’s SB 54, for example, requires most single use packaging and food service ware to be recyclable or compostable and obligates producers to fund roughly $500 million per year in system costs. Other states have adopted vastly different frameworks with meaningful differences that matter for compliance by a national producer.

Failure to comply can lead to penalties, enforcement actions, and, in some states, bans on selling noncompliant products.

Maryland’s Expanding EPR Framework

Maryland has embraced EPR across several product categories. Businesses should already be familiar with:

Electronics (E-Waste): Maryland’s Statewide Electronics Recycling Program requires manufacturers of covered electronics to provide free take back at retail locations where their products are sold, and charges manufacturers per unit sold.
Paint: Under the Maryland Paint Stewardship Act, paint manufacturers will fund and operate a statewide program beginning in 2026 for the collection and proper recycling or disposal of leftover paint, with a gallon of paint surcharge.
Packaging and Paper Products: The most significant recent development is the Packaging and Paper Products Producer Responsibility Plans Act, signed into law on May 13, 2025. This statute requires producers of packaging and paper products to pay fees to support recycling and waste management systems.

The Maryland Department of the Environment has just released draft regulations, which will govern how this new packaging and paper products EPR program will operate and it is dramatically larger than the E-Waste and Paint programs. These proposed regulations are expected to affect not only large brand owners, but also certain small businesses that qualify as “producers” or that provide services within the regulated system. Public comments are being accepted until December 27, 2025.

The New Proposed Maryland Regulations

Objective and Scope. The proposed regulations in COMAR 26.04.14, Extended Producer Responsibility (EPR) for Packaging and Paper Products, implement Maryland’s EPR framework authorized by Environment Article §§ 9-2501 – 9-2512 of the Maryland Code. They detail how producers must register, report, and participate in a statewide system to manage the end of life handling of covered materials.

Key Definitions and Coverage. “Covered materials” include most packaging (primary, secondary, tertiary) and paper products sold or distributed in Maryland, including beverage containers, carryout bags, and multimaterial items. Exemptions apply to certain infant formula, medical, and other regulated packaging. A “producer” is defined by a hierarchy (manufacturer, brand owner, importer, distributor) depending on how the material enters the Maryland market. The regulations also define Producer Responsibility Organizations and terms such as recycling, reuse, composting, and responsible end markets.

Producer Registration and Plans. Producers must register with the Maryland Department of the Environment and either participate in a PRO or submit an Individual Producer Responsibility Plan. Annual registration must categorize covered materials

Why Recycling Policy Is Harder Than It Looks

EPR laws are being adopted against the backdrop of a failed recycling system. Nationally, less than 24% of discarded materials are recycled or composted. Cost allocation is arguably a barrier, but not the only impediment. Recycling requires capital intensive infrastructure, specialized equipment, and labor, while the market value of recycled materials is often lower than that of virgin materials.

Contamination further undermines system efficiency. Single stream recycling programs can experience contamination rates approaching 25%, driven by “wish cycling,” improper sorting, and the inclusion of non-recyclable items such as plastic bags, batteries, or food soiled materials. These mistakes increase processing costs, damage equipment, and ultimately reduce the value of recycled outputs.

It is significant that despite Maryland’s newly proposed packaging and paper products regulations, there is not a single paper processing facility within the state. Paper products may be collected, sorted, and baled but must then be shipped to out of state mills (.. because Maryland environmental laws would not permit a recycling facility), nearly all of which are overseas, for recycling. The environmental efficacy of transporting that recycling and processing it somewhere else is an issue.

Recycling also has environmental tradeoffs. Paper recycling consumes large amounts of potable water and chemicals; plastic recycling can release pollutants. While recycling is preferable to landfilling, solid waste collection in Maryland has been largely operated by local governments since the late 1880s; it is not a silver bullet.

Well designed EPR programs (.. possibly good examples are in battery recycling) must balance environmental benefit, economic feasibility, and practical implementation. An interesting example is the Washington Department of Ecology adopted new rule, the Battery Stewardship Program, to implement requirements under Washington’s battery EPR law that takes effect on January 16, 2026. Other states, including Maryland, are considering battery and battery containing product EPRs.

The Attorney’s Role in EPR Compliance and Strategy

We have worked in this space for more than a decade, including structuring one of the earliest Producer Responsibility Organizations. An environmental attorney does far more than interpret statutory language.

In this substantive space, we have experience working with businesses, including in the US Green Building Council’s TRUE Zero Waste Certification Program, where we have assisted organizations in developing a framework for drastically reducing waste, aiming for more than 90% diversion from landfills.

A Critical Moment for Maryland Businesses

Maryland’s proposed paper and packaging regulations will be expensive to comply with, costs that will be passed onto Maryland consumers, and will certainly not deliver commensurate environmental benefits. That makes participation in the current rulemaking process especially important. Businesses, from multi family residential to retailers, that remain silent now may find themselves locked into a regulatory structure that is costly, rigid, and difficult to unwind later.

Maryland’s EPR is actually designed to be a revenue source for government and nothing more. Does anyone think the Maryland Paint Stewardship Act has resulted in paint manufacturers changing the “design products and packaging that are easier to recycle, less toxic, and more efficient ..” or does a gallon of paint still look like a gallon of paint, just with a new 99 cent fee on every can? Moreover, the Maryland law does not have eco modulation features with bonuses for recycled content, bio based materials, or the like.

EPR is not going away, in Blue states, despite being bad public policy. For businesses, the question is whether compliance will be reactive and fragmented or strategic, informed, and legally defensible. Engaging experienced environmental counsel early may be the difference between treating EPR as an unmanaged cost center or utilizing it as an opportunity to reduce risk, influence policy, and plan intelligently.

The alternative attributed to Thomas Lindquist is embracing the concept that if a consumer product cannot be reused or recycled at the end of its life, then it should not be sold at all.

Note that the content above has been generated by an artificial intelligence language model transcribing and combining my comments as a guest on a podcast last week. My words may not be entirely error free, and should you have questions, please reach out to me.

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Exposomics Is the Environmental Issue Business Should Take Seriously

By Stuart Kaplow on December 14, 2025 Posted in Environmental, Green Building

For decades, environmental law focused on the visible and the catastrophic: spills, smokestacks, Superfund sites, and enforcement actions after damage was done. Today, a quieter but far more pervasive environmental issue is moving to the center of serious scientific and commercial attention: exposomics.

Businesses should be paying close attention because exposomics reframes environmental risk not as an abstract regulatory concern, but as a measurable driver of human health, workforce productivity, liability exposure, and asset value.

At its core, the exposome describes the totality of environmental exposures an individual experiences over a lifetime and how those exposures affect biology and health.

Exposomics is the science devoted to studying those exposures from conception to death. It complements genetics by examining how chemicals, diet, lifestyle, stress, socioeconomic conditions, infections, radiation, and physical activity interact with our biology to influence disease and in particular, a modern chronic illness epidemic. Using advanced “omics” tools, wearable sensors, and environmental monitoring, exposomics seeks to connect environmental drivers to biological responses, revealing nongenetic causes of disease and opening the door to prevention rather than treatment.

Why should businesses care? Because the long promised revolution of genetics did not fully materialize. The Human Genome Project was supposed to explain disease and unlock cures. Instead, the Centers for Disease Control and Prevention now acknowledge that genetics accounts for roughly 10 percent of disease, with the remaining causes largely environmental. In other words, what surrounds us, and what we allow into our air, water, food, and buildings, matters far more than what we inherit.

Recent research underscores this point. In a study of nearly half a million people in the United Kingdom, Oxford researchers concluded that environment and lifestyle were ten times more likely than genetics to explain premature death. That finding should be a wake up call for anyone responsible for workplaces, housing, or consumer products.

Consider Parkinson’s disease. It is now the second most common neurological disorder in the United States after Alzheimer’s, with approximately 90,000 new diagnoses each year. Parkinson’s rates have doubled over the past 30 years and are projected to increase another 15 to 35 percent per decade. That is not how inherited genetic diseases behave. The latest research suggests that only 10 to 15 percent of Parkinson’s cases are fully explained by genetics.

As Dr. Ray Dorsey, a neurologist at the University of Rochester, has put it: “The health you enjoy, or don’t enjoy, today is a function of your environment in the past.” That environment includes air pollution, pesticides, PFAS, solvents, and legacy contaminants embedded in buildings and infrastructure. In his book Ending Parkinson’s Disease, Dorsey argues that Parkinson’s is largely an environmental disease, with up to 90 percent of cases linked to chemical exposures, including pesticides and solvents such as trichloroethylene (TCE). If that is correct, Parkinson’s is not inevitable; it is preventable.

TCE is a particularly troubling example. No one knows precisely how much of the world’s drinking water is contaminated, but the CDC estimates that between 4 and 18 percent of Americans are exposed, while the Environmental Working Group places the number at roughly 17 million people. While TCE’s link to cancer is well established, its neurological impacts are still being unraveled.

The pesticide paraquat, strongly associated with Parkinson’s among farmworkers, remains legal in the United States despite being banned in Europe and China. This uneven regulatory landscape does not inspire confidence.

The broader chemical picture is even more concerning. Of the roughly 350,000 chemicals in commerce, only about 1 percent have ever been tested for safety. In more than half a century, the U.S. Environmental Protection Agency has banned or meaningfully restricted only a dozen or so substances, while the European Union has restricted more than 2,000.

It is easy to mock suburban “MAHA moms” making their own food coloring or refusing to microwave plastic. But their instincts are not irrational. Increasing numbers of Americans, including this author, filter drinking water, run air purifiers, choose fragrance and dye free products, buy organic produce, and avoid heating food in plastic. They are responding to uncertainty in U.S. commerce that has not kept pace with modern science. Who thinks it is a good idea to use artificial food dyes in children’s breakfast cereal that are synthetic chemicals derived from petroleum?

Autism offers another sobering data point. Diagnoses have increased from approximately 1 in 10,000 children in the 1970s to 1 in 36 today. Genetics and improved screening do not fully explain that rise, according to experts such as Johns Hopkins toxicologist Thomas Hartung.

Since the 1990s, more than 75 percent of American adults live with at least one chronic disease, including autoimmune disorders, insulin resistance, and neurodevelopmental conditions. Hartung estimates that only five percent of disease is purely genetic, and fewer than 40 percent have any meaningful genetic component at all.

This is where exposomics becomes directly relevant to business. It has already gone mainstream in commercial real estate and corporate operations. Tenants increasingly negotiate for purified drinking water and indoor air quality, demanding minimum standards for healthy air, use of low emitting materials, requiring better ventilation and pollutant testing (like formaldehyde, fine particulate matter, and VOCs), and healthy food options,with the aim of better occupant health, productivity, and energy efficiency. These are not fringe demands. They are risk management strategies informed by emergent science and driven by workforce and other stakeholder expectations as well as competitive differentiation.

From an environmental attorney’s perspective, exposomics also foreshadows liability. As science improves our ability to link specific exposures to specific health outcomes, the evidentiary gap that once protected polluters and product manufacturers will narrow. Businesses that proactively reduce exposures, including with green buildings (.. LEED, Green Globes, and the like), will be better positioned than those that wait for regulation or litigation to force change.

Exposomics is not about panic. It is about precision, measuring what we are exposed to, understanding how it affects us, and making informed decisions. For business owners, that means recognizing that environmental health is no longer a populist slogan in a political movement or a public relations exercise. It is a core operational, legal, and financial concern.

Exposomics is the environmental issue you should take seriously because your employees, tenants, customers, and balance sheet already are.

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Reopening a 10 Year Old Bankruptcy for Environmental Claims to Bring Finality to CERCLA Liability

By Stuart Kaplow on December 7, 2025 Posted in Codes and Regulations, Federal

Environmental and real estate practitioners spend a great deal of time counseling clients on how to avoid or allocate liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA a/k/a Superfund). For purchasers of property, the Phase I Environmental Site Assessment is often the talisman performed to establish the innocent landowner or bona fide prospective purchaser defenses to CERCLA.

But another, often overlooked, doctrine can be just as powerful in establishing certainty and defending against environmental claims: the finality of a confirmed bankruptcy plan, and a bankruptcy court’s authority, even years later, to interpret and enforce its own orders. Make no mistake, the Bankruptcy Act of 1800 can trump CERCLA of 1980.

The Third Circuit’s recent decision in In re Congoleum Corp., 149 F.4th 318 (3d Cir. 2025), underscores just how potent that tool can be. In a divided opinion, the court affirmed a bankruptcy court’s decision to reopen a Chapter 11 case that had been closed for more than a decade, for the purpose of interpreting whether environmental claims against a former affiliate were barred by the plan and confirmation order. The court’s support for the Bankruptcy court’s jurisdiction and its reaffirmation of the binding effect of confirmation findings should be welcomed by companies seeking certainty in environmental risk allocation.

Section 350(b): The Narrow Doorway to Reopening

Bankruptcy cases, after full administration of the estate, are to be closed under Section 350(a). Yet Congress provided an escape hatch in Section 350(b), allowing reopening “to administer assets, to accord relief to the debtor, or for other cause.” Courts have long described this as a narrow doorway, used sparingly, and only in circumstances where reopening serves a compelling purpose that outweighs the need for finality.

In Congoleum, the Bankruptcy court found cause to reopen a long closed case because the motion implicated the interpretation and enforcement of core bankruptcy orders: the approval of a major insurance settlement and the plan confirmation order. The Third Circuit agreed that this was a paradigmatic example of “other cause.” Not only environmental lawyers but all owners of real estate should pay close attention here. Even when environmental claims arise outside the bankruptcy context and years after case closure, the question of whether those claims were barred, allocated, or addressed in a bankruptcy plan can still be squarely within a bankruptcy court’s jurisdiction.

Bankruptcy Court Jurisdiction Even Over Environmental Claims Involving Non Debtors

A substantial portion of the Third Circuit’s analysis focused on jurisdiction and appropriately so. After all, bankruptcy judges are Article I judges, not Article III judges. And the District court below held that only the original confirming court (a District judge) could interpret the confirmation order.

The Third Circuit majority rejected that argument. It emphasized that confirmation of plans is a core proceeding under 28 U.S.C. § 157(b)(2), and that interpreting and enforcing plan provisions is within the bankruptcy court’s authority, regardless of the fact that a District judge originally entered the confirmation order. The panel also underscored that the District court had long since referred the case back to the bankruptcy court, which had already meaningfully adjudicated related issues in a later bankruptcy case.

For environmental lawyers, this is a significant signal: when environmental claims collide with bankruptcy allocation of liabilities, the bankruptcy forum remains central, even years later.

Notice Matters: CERCLA Claims Cannot Escape the Binding Effect of a Plan

One of the core holdings in Congoleum was the rejection of Occidental Chemical Corporation’s argument that it was not adequately notified of the plan provisions and settlement findings that assigned sole responsibility for the flooring business’s liabilities to Congoleum, not Bath Iron Works, the former affiliate. The Third Circuit majority held that Occidental received proper notice of the settlement, the plan, and the confirmation hearing, and therefore was bound by the resulting orders.

Environmental lawyers frequently see CERCLA defendants attempt to escape prior orders by asserting lack of notice or by arguing that environmental liabilities cannot be limited or reallocated in bankruptcy without violating CERCLA. The Third Circuit rejected that framing. The court held that the bankruptcy court’s findings did not release a party in the case from liability; instead, they established that the party never had such liability. That distinction is critical and powerful. It frames the bankruptcy court’s action not as a prohibited third party release, but as a determination of historical fact tied to ownership and successor liability and that is huge as companies are bought and sold or transferred by merger of the sale of assets.

Res Judicata: Finality Protects Those Who Rely on the Bankruptcy System

Perhaps most important, the Third Circuit affirmed that confirmation orders are final judgments with full res judicata effect, binding all creditors with notice, including parties with environmental claims. The court found that the issues Occidental sought to litigate in District court were the same issues resolved years earlier in the bankruptcy case. That is a strong and clear statement: CERCLA’s formidable strict liability scheme does not override the binding finality of bankruptcy orders.

And that matters, not just for the extraordinary facts of Congoleum, but for the thousands of real estate transactions conducted every year. Buyers rely on environmental due diligence. Sellers rely on indemnities. And when environmental liabilities are addressed in bankruptcy, as they often are in reorganizations involving industrial sites, manufacturers, and chemical operations, the market needs confidence that those allocations will stick.

Why This Case Matters Beyond Its Unusual Facts

While the Congoleum case is unusual even by CERCLA standards, the Third Circuit’s opinion provides rare clarity in an intersection of law that is too often murky. Bankruptcy is not merely a financial restructuring tool; it is a powerful mechanism for resolving environmental liabilities with finality. And it is a far more common backdrop to environmental risk allocation than many appreciate.

Whether in reorganizations involving legacy manufacturing facilities, brownfields being redeveloped, or complex multi party Superfund sites, business owners should recognize that:

Bankruptcy court findings about environmental liabilities have a lasting, binding effect.
Those findings can be enforced even a decade later.
Section 350(b) provides meaningful authority to reopen cases where environmental disputes implicate the interpretation of a plan.

For environmental lawyers advising clients on CERCLA liability, and for real estate professionals evaluating historic contamination risk, the Congoleum decision is a reminder that environmental liability does not exist in a vacuum. Bankruptcy courts play a central, constitutionally grounded, and durable role in determining who ultimately bears responsibility for environmental harm.

A key takeaway is that a bankruptcy remote single asset entity, LLC or otherwise, is a preferred legal structure to be used in real estate to minimize risk.

When done right, the bankruptcy system provides what environmental law rarely does: certainty.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Mandatory GHG Disclosures in Real Estate Contracts” on Tues, Dec 16 at 9 am. The webinar is complimentary, but you must register here.

Déjà Vu Again: Federal Agencies Move to Restore Clarity in Endangered Species Regulations

By Stuart Kaplow on November 30, 2025 Posted in Codes and Regulations, Environmental

Just before Thanksgiving, while most Americans were preparing for turkey and stuffing, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service set the table for a major regulatory reset under the Endangered Species Act. And no, turkeys are not threatened or endangered, but the wood stork is, along with 89 other American bird species and more than 2,140 plants and animals currently listed under the 1973 law.

Biodiversity degradation is an existential crisis affecting planetary and human health, but the 1973 Endangered Species Act, as it has been administered, falls short. It is widely accepted that in the five decades the law has been in effect, populations of mammals, birds, amphibians, and fish have dropped a shocking 68 percent.

For those engaged in business in which real estate is an asset, last week’s announcement of four proposed ESA rules is more than administrative housekeeping. It represents a meaningful turn toward restoring the predictability, efficacy, and statutory fidelity that the regulated community relies on to make informed decisions about land and capital under a federal law up to the challenge.

The proposals would roll back Biden era ESA regulations, widely criticized for expanding federal reach, creating unnecessary complexity, and drifting away from the statute’s text, all despite more than five decades of ESA implementation history. These new rules implement Executive Orders 14154 (“Unleashing American Energy”) and 14219 (“Department of Government Efficiency”), as well as Secretary’s Order 3418, which collectively direct agencies to remove regulatory barriers that impede responsible resource development and economic growth while maintaining the conservation mission Congress intended.

As Secretary of the Interior Doug Burgum put it, the administration is “restoring the Endangered Species Act to its original intent, protecting species through clear, consistent and lawful standards that also respect the livelihoods of Americans who depend on our land and resources.”

What the Four Proposed Rules Would Do

1. Listing and Critical Habitat (50 CFR part 424)
This rule would return the listing process to the 2019 regulatory text. Most significantly, it would once again allow transparent consideration of economic impact information that does not dictate the listing decision but helps the public understand its implications. It also restores clarity to the “foreseeable future” standard and reinstates the longstanding two-step analysis for designating unoccupied habitat. For developers of real estate projects managing timelines and financing, a return to well understood definitions is not trivial.

2. Interagency Cooperation (50 CFR part 402)
Section 7 consultation has long been the chokepoint where project timelines can stall. The agencies propose to restore the 2019 definitions of “effects of the action” and “environmental baseline,” removing the 2024 “offset” provisions that never fit comfortably within the statute. These revisions directly respond to the Supreme Court’s landmark Loper Bright decision, which ended Chevron deference and reinforced that agencies must adhere to the ESA as written. Clarity in consultation is clarity in project management.

3. Threatened Species Protections (section 4(d))
FWS proposes to eliminate the “blanket 4(d) rule,” replacing it with species specific rules for threatened species. This aligns FWS with NMFS’s longstanding approach and reflects the best reading of the statute under Loper Bright. Importantly for real estate interests, this ensures that restrictions are narrowly tailored, avoiding one size fits all prohibitions that needlessly burden otherwise routine activities.

4. Critical Habitat Exclusions (section 4(b)(2))
Finally, FWS proposes to reinstate its 2020 critical habitat exclusion rule governing how economic, national security, and other impacts are considered when evaluating whether to exclude areas from critical habitat. This process had been disrupted by the 2024 rules. The reinstated framework promises transparency and predictability while retaining the agency’s authority to protect species from extinction.

Director Brian Nesvik of FWS emphasized that these actions “restore clarity and predictability” and keep the focus on “recovery outcomes, not paperwork.” That message resonates strongly across industries that depend on stable regulatory expectations.

What These Changes Mean on the Ground

While none of these rules individually upends the ESA landscape, their collective impact is significant. Pending lawsuits challenging the 2024 regulations may become moot or need to be amended, and new challenges are likely. Of particular note: these proposed rules do not address the Service’s recent proposal to rescind the ESA’s definition of “harm,” a high stakes issue to watch closely.

Because all four proposed rules are prospective, current ESA determinations remain valid. Existing consultations, biological opinions, and critical habitat designations continue to control ongoing operations. But regulated entities should anticipate that threatened species protections may shift once species specific 4(d) rules come online, and consultation procedures for new projects will almost certainly change.

In short, the rules promise more clarity, but also more change, both of which will better respond to biodiversity degradation.

Of note, these changes will not impact state laws, like the Maryland Nongame and Endangered Species Act where the state has its own list of protected species not on the federal list, including legislatively (i.e., not through any scientific or data driven process) protecting species not federally listed, 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 regulatory reach and imposing significant economic burdens on landowners in the State with no real benefit to planetary or human health.

A Look Back and Forward

Veterans of ESA practice may recall that the first federal endangered species list included a handful of charismatic megafauna, including the grizzly bear. The ESA’s scope has since expanded dramatically, even as biodiversity loss accelerates. Critics argue the statute has failed to meet the scale of today’s ecological challenges. Supporters emphasize that the law remains one of the strongest conservation tools ever enacted.

Regardless, the regulated community functions best under clear, consistent rules. These proposals aim to deliver just that.

The agencies are accepting comments through December 21, 2025. Stakeholders in real estate, construction, infrastructure, and energy development would be wise to weigh in. When it comes to ESA regulation, clarity is not merely good governance; it is a competitive advantage that is also good for biodiversity degradation.

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