Last December, USA Today published an inflammatory report alleging that many of the nation’s school children were being subjected to potentially dangerous levels of air toxics, including a variety of metals, combustion byproducts, and volatile organic compounds (“VOCs”). The accusations, leveled at industrial manufacturers, such as steel mills, oil refineries, and power plants, have sparked widespread calls for action from the public and regulatory community.

Indeed, the U.S. Environmental Protection Agency’s (“EPA’s” or “the Agency’s”) new Administrator, Lisa Jackson, addressed the issue of air quality around the nation’s schools in her recent Senate confirmation hearings and immediately made it one of EPA’s top priorities. The Agency, in response, recently announced a bold program targeting air quality around the nation’s schools. The project, known as the Schools Monitoring Initiative, focuses on monitoring air quality at 62 designated schools in 22 states and will likely have major legal and compliance consequences for a variety of industrial facilities.

In an early sign that the USA Today report and EPA’s program have already gained traction, on March 25, a class action lawsuit was filed in Indiana State Court against several manufacturers. The lawsuit, which cites the USA Today report and EPA data, alleges that for many years these companies knowingly subjected school children to some of the highest levels of toxic air emissions in the country. Given EPA’s intense focus on this issue, and the sensitivity of the subject, the Indiana class action suit could be the first of many similar lawsuits throughout the country.

This issue brief discusses the schools monitoring initiative and the ongoing and potential litigation, and also addresses several major problems with the data and models being used as a basis to form the allegations against industrial facilities. The issue brief also discusses what companies can do to prepare for the increased regulatory and litigation threat posed by the current focus on air quality around the nation’s schools.

USA Today Report Raises Alarm

Last fall, USA Today, in conjunction with Johns Hopkins University, began an air monitoring program at 95 schools in 30 states to gather data about the levels of air toxics – including lead, manganese, chromium, benzene, and naphthalene, among others – to which school children in these areas potentially are exposed. The monitoring, conducted over four to seven days in each location, centered on schools in and around industrial facilities such as steel mills, power plants, and oil refineries.

On the surface, the newspaper report paints a bleak picture. The authors highlight school sites that showed air toxic levels significantly higher than EPA standards, and generally describe how exposure to these toxics carried risks of cancer and other adverse health effects, especially in children, who breathe more air per pound and process chemicals differently than adults. The report is based heavily on data and modeling found in EPA’s Risk-Screening Environmental Indicators (“RSEI”) database. Based on this information, the report concludes that the “monitoring showed pollution at levels that could make people sick or significantly increase their risk of cancer if they were exposed to the chemical for a long period.” Not surprisingly, the USA Today report generated widespread concern.

The EPA Schools Monitoring Initiative

Largely in response to the USA Today report, on March 31, EPA announced a comprehensive monitoring initiative to take place at 62 schools in 22 states¹. The Agency selected the schools based on a variety of factors, including information from the USA Today series, all of which concentrate on potential air toxics exposure at schools in close proximity to industrial facilities.

The monitoring will be phased in over the next three months, with monitors to be in place at each school for 60 days and samples taken on 10 days during that time. EPA will measure the following pollutants:

Carbonyls: acetaldehyde
Diisocyanates: methylenediphenyl diisocyanate (“MDI”); 2,4-toluene diisocyanate; 1,6-hexamethylene diisocyanate
Metals: arsenic; cobalt; hexavalent chromium; lead; manganese; nickel
Polycyclic Aromatic Hydrocarbons (“PAHs”): benzo (a) pyrene and other PAHs; naphthalene
VOCs: acrolein; benzene; 1,3-butadiene
4,4’-methylenedianiline (“MDA”)

The Agency has indicated that, depending on the results, it may continue monitoring or require nearby facilities to mitigate the pollution.

The Indiana Class Action Lawsuit

The USA Today report not only prompted EPA’s monitoring initiative, but also spurred the first of what could be a proliferation of lawsuits alleging that industrial facilities have endangered childrens’ health by emitting unsafe levels of toxic chemicals into the air near schools for many years. The factual allegations underpinning the complaint largely are based on the USA Today report. More specifically, the complaint cites the report’s “toxicity assessments” for each school, which were based on a combination of the USA Today/Johns Hopkins monitoring data, emissions data from the EPA’s Toxic Release Inventory (“TRI”), and toxicity and risk information from the RSEI database. In other words, the conclusions drawn in the complaint about the health risks to school children do not derive from reports of adverse health effects or actual monitoring data, with the exception of the limited and statistically questionable four to seven days of monitoring conducted by USA Today. Rather, the allegations are primarily based on conclusions drawn from EPA’s TRI data and generic modeling included in the RSEI database.

Plaintiffs claim that data from the TRI/RSEI show that children in Lake County, Indiana have been and continue to be subjected to some of the highest levels of toxic air emissions in the nation, and as a result, that the harm or risk of harm of such exposure is real and high. Plaintiffs also allege that the industrial facilities have known about the exposure risk for years, but have failed to do anything about it. The lawsuit was filed under an Indiana state “nuisance” statute and requests compensatory and punitive damages, as well as injunctive relief requiring the Defendants to fund a life-long medical monitoring program for the entire Plaintiffs’ class.

Problems With TRI and RSEI – Incorrect Assumptions About Exposure and Toxicity

The inclusion of the TRI/RSEI data as the factual underpinning for the lawsuit is critical. The RSEI database, which is driven by TRI data, presents a highly distorted picture of the actual air emissions of, and the resulting risk of human exposure risk to, the toxic chemicals and metals at issue. As a result, the conclusions drawn in the USA Today article, as well as the Indiana class action lawsuit, are dubious and, at best, misleading.

The RSEI uses data on annual “releases” of chemicals to the environment as reported by industry under the TRI program. Based on the data, the RSEI makes sweeping generalizations about the potential risks posed by emissions of TRI-reportable chemicals. For example, the RSEI generally (and erroneously) assumes that all forms of a metal are as potentially hazardous as the most toxic species of the metal.² This oversimplification grossly distorts the risk values assigned to many metals, such as nickel and chromium (e.g., by assuming that all chromium, an essential human nutrient, is as toxic as hexavalent chromium compounds).³ Based on these assumptions, the RSEI generates a “risk” valuation for emissions from various industrial facilities.

In addition, the use of TRI data to estimate potential exposures and air impacts results in inflated risk conclusions. TRI collects information on “releases” and recycling of “toxic” chemicals, including quantities transferred off-site for disposal in a regulated landfill often located many miles away. As a result, the RSEI database greatly exaggerates potential exposures in the surrounding community. For example, the vast majority of chromium and nickel reported to the TRI database by steel mills is, in fact, not “released” to the environment at all. Instead, these metals are captured in air pollution control equipment (e.g., baghouses) and sent off-site for disposal or to a facility that recycles the materials, extracting the metals for productive use. The general public is in no way exposed to this material. Yet, RSEI uses the information to characterize risks to the surrounding community.

To its credit, the USA Today article notes how misleading use of the TRI/RSEI data can be. Near the end of the piece, the authors state that EPA (TRI/RSEI) data indicated that the air around Ashland City Elementary School (in Tennessee) was “rife with manganese,” and that the RSEI model ranked the air quality as among the worst for schools in the nation. However, when USA Today actually monitored the air at the school (which it did twice) the results showed levels of manganese thousands of times lower than what the RSEI model assumed they would be. The reason for the discrepancy was that the presumed manganese levels were based on TRI reported manganese “releases” by a water heater manufacturer in the area. Virtually all of the reported “releases,” however, were contained in flakes that fell to the shop floor and eventually moved off-site for disposal – but never actually emitted into the air.

In other cases, independent monitoring showed levels of toxics up to 10 times lower than what USA Today reported. These reports highlight the difficulty in basing risk judgments on data from relatively short monitoring periods and low sample numbers.

Fortunately, to prioritize schools for its monitoring initiative, EPA opted to use emissions data from the National Air Toxics Assessment (“NATA”) rather than the RSEI database. NATA provides a more comprehensive view of total pollution in an area, accounting for emissions from a variety of sources, including mobile sources, that are not tracked in TRI/RSEI (which only includes industrial emissions). Accordingly, some of the schools highlighted in the USA Today report are not included in the pending EPA study. While the use of NATA is an improvement, it must be recognized that the NATA is a product of its underlying assumptions, including the extensive use of generalized emission factors, and also inappropriate for site-specific risk assessment.

Discussion

The exposure of school children to toxic air emissions is rapidly becoming one of the most visible environmental issues of the day. Lisa Jackson, EPA’s Administrator, discussed the issue during her recent Senate confirmation hearings, and the Agency under her guidance is aggressively addressing the issue. Given the sensitive nature of the study population and the rhetoric implying that children are being exposed to cancer and other risks, the real and significant inaccuracies with the underlying study data may be overshadowed. Nonetheless, after the USA Today report triggered alarms with parents and regulators alike, more scrutiny of emissions from industrial facilities is likely, as is further litigation similar to the Indiana lawsuit.

The EPA monitoring initiative will be an important step in revealing actual emissions levels at these schools. On the one hand, EPA’s efforts should help dispel some of the misinformation that the USA Today report and associated litigation has generated. On the other hand, the EPA program also could be used to identify schools experiencing allegedly adverse air quality conditions and the contributing facilities.

Further attention should be paid to the use and utility of the information provided under the TRI program and in the RSEI database, as well as the NATA. As even the USA Today report makes clear, the use of TRI and RSEI data is fraught with the potential for error and exaggeration. Toxicity and risk assessments based primarily on the RSEI database are at best misleading. As the Indiana class action litigation demonstrates, such information is easily obtained and can be used to form the factual basis for formal allegations of liability in a lawsuit.

Going forward, facilities such as steel mills, power plants, and oil refineries, as well as other emission sources in the vicinity of schools, are expected to confront this issue in multiple arenas. On the regulatory front, EPA has already begun its Schools Monitoring Initiative. Companies should track EPA’s progress and identify which facilities are likely to be affected. Further, facilities should examine the characterization of their facility in the RSEI database, and, if necessary, take steps to correct any misleading information or prepare to address any questions that may arise from regulators, the media, and the public.

Data from the RSEI and TRI databases are likely to be particularly problematic with respect to litigation. As with the class action lawsuit in Indiana, plaintiffs can be quick to rely on assumptions and assessments based on RSEI and TRI data to make allegations regarding the potential exposure of children to toxic air emissions from industrial facilities. A sound litigation defense strategy should recognize the potential for significant inaccuracies associated with RSEI and TRI data and properly distinguish between a facility’s actual risk contribution and alleged risks based on inaccurate data assumptions.

Kelley Drye & Warren LLP

Kelley Drye & Warren LLP (“Kelley Drye”) has extensive experience addressing toxicity and risk issues in the regulatory and litigation arenas. Kelley Drye’s Environmental, Health & Safety practice group has worked for years advising companies on TRI matters, managing risk assessments, and addressing toxicity and risk issues with EPA, OSHA and other regulatory agencies. The practice also has developed detailed critiques of the RSEI database and can assist companies in researching the database and preparing an effective strategy for use with regulators and the public. The Environmental practice’s lawyers include experts on the toxicity of and potential risks posed by metals, including manganese, chromium, nickel and lead, as well as VOCs, mobile air toxics, and other chemical substances.

Kelley Drye’s Litigation practice group has many years experience on toxic tort matters and cases involving alleged risks posed by metals and other chemicals. Attorneys in the Litigation practice have been involved in many of the major toxic tort battles over the past 30 years, including litigation involving environmental contamination, asbestos, lead, chromium, nickel, manganese, and benzene. In addition, Kelley Drye’s Litigation and Insurance Recovery practice groups have extensive experience assisting policyholders faced with environmental claims to obtain insurance coverage. Attorneys in the Litigation and Insurance Recovery practices have secured billions of dollars in insurance coverage for their clients by employing creative strategies in litigation, alternative dispute resolution, and settlement.

For further information, please contact:

John L. Wittenborn
Chairman of the Environmental Law practice
202.342.8514
jwittenborn@kelleydrye.com

Joseph J. Green
Special Counsel, Environmental Law practice
202.342.8849
jgreen@kelleydrye.com

¹Among the schools already announced for monitoring under the EPA program include:

Alabama: four in or near Birmingham
California: three in or near Los Angeles (Los Angeles, El Monte, Lennox); one near San Jose (Cupertino)
Iowa: one in central Iowa (Story City)
Illinois/Indiana: three in or near Chicago and Gary; one outside Fort Wayne (Warsaw); one outside Indianapolis
Kansas: one in Wichita
Kentucky: three in Ashland
Louisiana: one in Shreveport
Michigan: one in Detroit; one in Muskegon
Minnesota: one in Minneapolis
Mississippi: one in Enterprise
New Jersey: one outside Newark (Elizabeth); one outside Philadelphia (Paulsboro)
New York: one in New York City; one in Western upstate New York (Olean)
Ohio: one west of Toledo (Wauseon); two in southeastern Ohio near the West Virginia border (both in Marietta); one in southern Ohio (Ironton) near the Kentucky and West Virginia borders; three along the Ohio-Pennsylvania border (two in Warren, one in East Liverpool)
Oregon: one in Portland; one outside Corvallis (Toledo)
Pennsylvania: four in the Pittsburgh area (Clairton, McKeesport, two in McKees Rocks); one in Reading; one southeast of Harrisburg (Hallam)
South Carolina: one outside Charleston (Charleston Heights)
Tennessee: two east of Nashville (Ashland City, New Johnsonville); three outside Knoxville (Mosheim, two in Vonore)
Texas: four in or near Houston (Houston, Cypress, two in Deer Park); one in Dallas; one in southeast Texas (Diboll); one outside Wichita Falls (Burkburnett)
Virginia: one near Lynchburg (Madison Heights)
Washington: one in Seattle; one near the Oregon border (Longview)
West Virginia: one in Huntington; one in Vienna (near Marietta, Ohio); two in Follansbee (west of Pittsburgh)

²The RSEI website notes that “[m]etals and metal compounds are assumed to be released in the valence (or oxidation) state associated with the highest chronic toxicity weight.”

³For example, the risk value assigned to a specialty steel mill largely on the basis of chromium emissions assumes that the chromium is entirely in hexavalent form. In reality, an EPA study of emissions from that facility has shown that over 99% of the facility’s chromium emissions are not of hexavalent variety. Nevertheless, the exaggerated RSEI risk valuation results in ranking this facility among those presenting the highest risk to the surrounding community.

EPA Studying Air Toxic Emissions Near Schools, While Litigation Commences