United States: EJ Evolution: EPA Closes Title VI Investigations Into LDEQ And LDH

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On June 27, 2023, the EPA administratively closed its Title VI investigations into whether the Louisiana Department of Environmental Quality ("LDEQ") and the Louisiana Department of Health's ("LDH") permits and other approvals regarding two facilities resulted in racial discrimination. These investigation closures do not lessen the importance of environmental justice in state and federal permitting, but they do signal that, for now, Louisiana will not be required by the federal government to adopt procedural changes to address cumulative and disparate impacts on environmental justice communities.

Under Title VI of the Civil Rights Act, persons, including states, who receive federal funding, cannot discriminate on the bases of race, color, national origin, or sex. The EPA opened two Title VI investigations in April 2022, based on two complaints—one based on approvals for the Denka Performance Elastomer facility ("Denka") in St. John the Baptist Parish and one based on approvals for the proposed Formosa Plastics facility ("Formosa") in St. James Parish.

In October 2022, the EPA sent its initial findings, indicating that some of LDEQ and LDH's practices may be in violation of Title VI. Specifically, the EPA pointed to disparate adverse impacts (namely, cancer rates) that were being experienced by Black residents and the lack of Title VI or environmental justice policies from the Louisiana state agencies. During this time, the EPA and Louisiana agencies were engaged in informal resolution agreement discussions, where the EPA strongly encouraged the state agencies to adopt environmental justice and Title VI policies which examine cumulative impacts and disparate impacts in environmental justice communities.

In May 2023, the state of Louisiana filed suit in federal court challenging the EPA's Title VI investigation, and on June 21, 2023, the state moved for a preliminary injunction to, inter alia, prevent the EPA from imposing or enforcing disparate-impact-based requirements. A week later, the EPA administratively closed the challenged investigations.

In closing the Title VI investigation based on the Denka facility, the EPA explained that it is taking multiple other actions to address the potential disparate impacts felt by Black residents, including:

• In December 2022, a consent agreement and final order under the Resource Conservation and Recovery Act under which Denka has agreed to improve waste management practices to lower chloroprene emissions;
• In February 2023, a civil enforcement suit filed in federal court under Section 303 of the Clean Air Act to compel Denka to eliminate the imminent and substantial endangerment posed by its chloroprene emissions;
• In April 2023, a proposed rule under the Clean Air Act to reduce emissions of chloroprene nationwide;
• A planned cumulative impact assessment (CIA) of the area near the Denka facility to analyze total exposure to combinations of chemical and non-chemical stressors and the effects on health; and
• A centralized EPA website for the area, which includes information on the facility and EPA actions being taken.

In closing the investigation related to the Formosa facility, the EPA explained that the air permits which were the basis for the complaint are still pending before the state agency, after a state district court vacated the permits in September 2022. The state court vacated the permits, in part, based on an inadequate environmental justice review. This decision is currently on appeal.

By closing the Title VI investigations, the EPA likely will not use Title VI to require LDEQ, or other Louisiana agencies, to conduct cumulative impact analyses and consider disparate impacts when making decisions.

Importantly, this does not mean that environmental justice analyses are not required for Louisiana permits. Cumulative and disparate impact analyses still may be required under the federal NEPA process, federally-approved programs, and under Louisiana's Public Trust Doctrine. The guidelines for how to consider environmental justice under the NEPA process are to be updated by October 2024 under Executive Order 14096, and the updated guidance will include analyzing cumulative impacts. These environmental justice requirements may also be required as part of the EPA's approval of state programs. For example, the EPA has proposed granting primacy to Louisiana for Class VI injection wells (carbon sequestration wells), and as part of the EPA-approved program, Louisiana has agreed to evaluate environmental justice concerns for proposed projects, including "the presence of existing environmental hazards, cumulative impacts, potential exposure pathways, and susceptible sub-populations, as well as the likely distribution of any environmental and public health benefits." Moreover, the state court ruling which vacated the Formosa air permits could lead to additional requirements for state agencies to consider environmental justice impacts under the state's Public Trust Doctrine.

As the above demonstrates, environmental justice is still very much an evolving area of law in Louisiana. Companies seeking permits for industrial projects or assessing enforcement risks should ensure that environmental justice issues are appropriately considered.