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For Attorney General, A Tough Prosecutor

In an op-ed published in The Hill on Friday, CPR President Rena Steinzor makes the case that in appointing a successor to Attorney General Eric Holder, President Obama needs to find a prosecutor tough enough to go after corporate malfeasance with more than a series of comparatively weak deferred prosecution agreements.

She writes,

Of course, prosecutors can’t send corporations to jail — they are inanimate paper entities. But forcing them to acknowledge that they broke criminal laws is more than a symbolic gesture, which is why corporate lawyers work so hard to avoid such outcomes. The stigma of such guilty pleas lasts, rightly spooking existing and would-be investors.

Holder’s record in this area is tainted by his embrace of the “too big to jail” argument that the collateral damage from going after even the most serious corporate malefactors is intolerable. She writes,

This egregious off-ramp was spawned by the distorted fable the Fortune 100 have spun to explain the demise of Arthur Andersen, which followed its gigantic client, Enron, out of business within months after the sham finances they had erected together hit the press. The fable attributes Andersen’s collapse to a criminal indictment lodged by Justice Department prosecutors. In truth, its clients had deserted the firm in droves when it was first implicated in the scandal, and the disclosure that employees had shredded tons of paper as soon as Enron was discredited hastened this exodus.    

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A Mass-Based Cap for Power Plants

EPA’s proposed new rule for greenhouse gas emissions from power plants gets a lot of things right. For one thing, it recognizes that electric utilities can employ a variety of measures to reduce greenhouse gas emissions. They can switch to natural gas or even renewable energy sources. They can fund end-use efficiency improvements—such as energy efficient windows, better insulation, and light bulbs that burn brightly even while they conserve electricity. All of these techniques reduce power plant emissions. So, EPA is right to make them building blocks for its rule. 

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Statement of CPR Executive Director Matt Shudtz on OSHA's Call for Dialogue on Chemical Exposure

Today, OSHA announced that it is seeking new ideas from stakeholders about preventing workplace injuries caused by exposure to harmful chemicals. The agency wants to identify new ways to develop Permissible Exposure Limits (PELs), the basic standards for reducing air contaminants.  

CPR's Executive Director Matthew Shudtz responded to the development:

It’s great that Dr. Michaels is continuing to seek new ways to eliminate or manage chemical hazards in the workplace.  OSHA has been relying on outdated standards for too long. But rulemaking is not the only way to address these hazards.  OSHA needs to use the enforcement tools it has available, especially the General Duty Clause.  With the General Duty Clause, OSHA can cite employers who are lagging behind industry standards for chemical exposure.

Last year, OSHA released new web-based tools to help employers voluntarily limit the exposure of workers to hazardous substances. In a blog Shudtz noted that the agency could use the General Duty Clause within the OSH Act to compel low-road employers to protect workers from harmful chemical exposure. According to the blog:

As OSHA freely admits, the Permissible Exposure Limits (PELs) found in current regulations are out-of-date and inadequately protective. Employers may expose workers to chemicals up to those limits without incurring fines for violating the standard, even though the exposures are patently dangerous. Most were adopted in the early 1970s and were based on scientific research from the 1940s through 1960s. In the late 1980s, the agency undertook an effort to set new exposure limits for hundreds of chemicals in one fell swoop, only to be thwarted by a court that wanted more detailed analyses of each individual chemical exposure limit. Since then, OSHA has initiated and finalized just one new PEL – as part of a comprehensive standard for hexavalent chromium exposure – but only after Public Citizen and the Oil, Chemical and Atomic Workers Union petitioned the agency to do so and fought a protracted legal battle to get the rulemaking started and completed. In the meantime, non-governmental organizations have continued to update their own occupational exposure limits (OELs) for chemicals found in the workplace, which many employers implement voluntarily because they know that OSHA’s standards don’t do enough to protect workers.

The broad recognition that workers face significant hazards even when chemical exposures are below OSHA’s PELs presents an interesting question about employers’ duty to protect their workers. Fortunately, Congress foresaw the potential for such a problem and included in the OSH Act a provision known as the General Duty Clause (GDC). Under the GDC, “Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

As interpreted by the Occupational Safety and Health Review Commission (OSHRC) and federal courts, OSHA must prove four elements to establish a GDC violation:

1.     Employees are exposed to a hazard;
2.     The hazard is recognized by the employer or the industry generally;
3.     The exposure has caused or is likely to cause death or serious physical injury; and
4.     There is a feasible means of abating the hazard.

Elements (1) and (3) are not generally significant hurdles when dealing with toxic chemicals. The difficult points for OSHA to prove are that a chemical hazard is “recognized” and that there are feasible means of abatement. But with the new annotated table of exposure limits, employers are on notice that exposures below OSHA’s PELs and above other organization’s OELs present hazards that are recognized by the occupational health community and the industry generally. And the new substitute-chemical toolbox may provide feasible means of abating those hazards.


GDC cases are not easy matters for OSHA’s enforcement staff or the agency’s lawyers, so we can’t expect to see a flood of new cases in the wake of today’s announcement. However, selective use of this enforcement theory could create a ripple effect that would ensure better protections for the many workers who are exposed to dangerous levels of toxins.

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Lessons From an Epidemic

Ebola’s natural reservoirs are animals, if only because human hosts die to too quickly. Outbreaks tend to occur in locations where changes in landscapes have brought animals and humans into closer contact.  Thus, there is considerable speculation about whether ecological factors might be related to the current outbreak. (See here).  At this point, at least, we don’t really know.  Still, it’s clear that outbreaks of diseases like ebola strengthen the case for forest conservation.  Which is also, obviously good for the environment.  But that’s not what I want to focus on here.

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SBA Office of Advocacy Continues to Carry ‘Water’ for Big Business

Apparently undeterred by all the bad press it has received lately, the Small Business Administration’s (SBA) Office of Advocacy has cast its controversy-attracting lightning rod ever higher in the air by issuing a feeble comment letter attacking the Environmental Protection Agency’s (EPA) pending rulemaking to define the scope of the Clean Water Act (“Waters of the US rule”).  The letter is just the latest evidence that the SBA Office of Advocacy has no interest in working to advance the unique interests of real small businesses—in accordance with its clear legal mandate—but instead is entirely focused on seeking to block those rules that are opposed by large business interests and their conservative allies.  

In its recent scathing report, the Government Accountability Office (GAO) raised several disturbing questions about whether and to what extent the SBA Office of Advocacy is actually fulfilling its statutory mission of serving as a “voice for small businesses within the federal government.”  Of immediate relevance here, one of the key issues identified in the report was that the SBA Office of Advocacy was never able to provide any evidence of small business input it received to inform its decision intervene in rules or the substance of its comments letter.  In other words, the SBA Office of Advocacy could never prove that its interventions were every actually prompted by small business concerns.  As described below, the SBA Office of Advocacy’s comment letter on the EPA’s Waters of the US rule only adds to these questions—and its provides additional impetus for needed reforms and increased congressional oversight to ensure that the agency is not wasting taxpayer money and helping large businesses to the direct detriment of the small firms they are supposed to be helping.

 

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A Blow to Public Interest Litigation

A Texas judge's award of attorney fees is a threat to all public interest groups, liberal or conservative.

A couple of weeks ago, a federal district judge in Texas awarded over $6 million in attorneys’ fees against the Sierra Club.  Sierra Club had survived motions to dismiss and for summary judgment, only to lose at trial. The court awarded fees on the ground that the suit was frivolous. The combination of rulings — denying summary judgment but then calling a lawsuit frivolous  — is virtually unheard of, at least in the absence of perjury by a witness or document tampering.  It’s hard to account for this peculiar ruling unless the judge was just cranky due to the summer heat in Waco.

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After Four Years, Chesapeake Polluters’ Free Ride May be Coming to an End

If you own a car, you’re used to paying a registration fee every two years. It may not be your favorite activity, but you do it. And you recognize that the fees and others like it help offset the cost of making sure vehicles on Maryland's roads are safe, that their polluting emissions are within acceptable limits, and that the people who drive them are licensed to do so.

But, in a report issued last fall (and an op-ed in the Baltimore Sun), CPR President Rena Steinzor and I pointed out that Maryland was not taking that same no-nonsense, even-handed approach to all pollution sources. Instead, state officials have given more than 500 concentrated animal feeding operations (CAFOs) a free ride since state oversight began in 2010, waiving more than $400,000 in legally mandated fees in 2013 alone.

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NAM Study on the Cost of Regulations based on Opinion Polls: Statement of CPR Senior Analyst James Goodwin

Today, the National Association of Manufacturers released a report produced by economic consultants Crain and Crain on the "cost of regulations to manufacturers and small businesses."

CPR Senior Analyst James Goodwin responded to the study:

Past Crain & Crain reports on the costs of regulation have been roundly and rightly criticized for unreliable research methods, including basing their studies on opinion polling. Not much has changed about their method in this latest iteration, unfortunately. They still pretend to project actual costs by relying on opinion surveys, and they still refuse to account for the enormous benefits of regulation to the economy and to Americans’ health and well being.  This is not surprising considering that National Association of Manufacturers V.P. Ross Eisenberg admits that they have instructed previous consultants to only look at the potential costs of regulations. The only good thing that can be said about this study is that at least the American taxpayer isn’t footing the bill this time.

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Crain and Crain are Back, and This Time They're Working for the National Association of Manufacturers

Having thoroughly tarnished their own reputations as well as that of the Small Business Administration’s (SBA) Office of Advocacy, economists W. Mark Crain and Nicole V. Crain are now preparing to make the big leap from thoroughly discredited academics to straight up shills for corporate lobbyists working to undermine public protections.  The National Association of Manufacturers (NAM), an industry trade group that vehemently opposes such policies as cleaning up air pollution and improving worker safety, yesterday announced that it will release a report tomorrow, prepared by the Crains, that purports to measure the “annual cost of federal regulations.”  That’s essentially what the Crains have been claiming to do for the Office of Advocacy until now, so it’s good news that at least it won’t be taxpayer money that’s footing the bill for their slanted research this time.

Just to review the bidding, in 2010, the SBA Office of Advocacy rather infamously sponsored a similar report by the Crains.  The key finding of the 2010 Crain and Crain report, which antiregulatory members of Congress and allied business groups and advocacy organizations have wasted little opportunity to cite, purported to find that the total costs of federal regulation in 2008 was $1.75 trillion.  

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CPR's Robert Fischman Testifies for the House Committee on Natural Resources on the Endangered Species Act

Today CPR Member Scholar and Indiana University School of Law professor Robert Fischman is testifying today for the House Committee on Natural Resources on potential amendments to the Endangered Species Act.

According to the testimony:

I. THE ENDANGERED SPECIES ACT SHOULD BE A LAST RESORT FOR CONSERVATION, NOT THE PRINCIPAL TOOL.

Though Congress intended the ESA to conserve “the ecosystems upon which” imperiled species depend,1 the act almost exclusively focuses on preventing species from going extinct. By the time species are listed for protection under the ESA, populations are already so depleted that there remains little flexibility for further declines. The famous inflexibility of the Act, to “halt and reverse the trend toward species extinction, whatever the cost,”2 is borne of the emergency situation facing a species when it declines to the very brink of extinction. Isolated fragments of habitat, low genetic diversity, and precious few populations raise the costs of conservation and heighten the consequences of failure.

To read the testimony in full click here.

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