False Claims Suit Against Danimer Scientific

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Danimer Scientific is facing a federal securities class action after an investor, Darryl Keith Rosencrants, filed a suit against the manufacturer in May, 2021.  The suit is a result of severe stock price drops after the publication of articles alleging the manufacturer made false claims on their products.  Danimer maintains that their claims are accurate.

Danimer sells polyhydroxyalkanoates (PHAs) under their brand name Nodax.  These PHAs are used in the creation of various plastic items, such as water bottles, straws, and food containers.  Danimer claims on their website that their Nodax products are 100 percent renewable and biodegradable in marine, freshwater, and soil environments.  They further state that the biodegradability due to certain microorganisms means the Nodax products have the possibility to biodegrade in landfills.

The plaintiff alleges Danimer overstated and exaggerated claims on the biodegradability of Nodax in oceans and landfills.  The plaintiff further claims that these statements led to an inflated value of the company and resulted in the severe drop in stock price once publication reported on the issue.  An article published in the Wall Street Journal on March 20, 2021 states Danimer made misleading claims and cites at least one expert calling Nodax’s biodegradability “not accurate” and “greenwashing”.  When stock trading opened again, Danimer’s value dropped 12.87 percent.

Spruce Point Capital Management, an investment firm, published a report critical of Danimer on several issues, including degradability, on April 22, 2021.  Throughout the trading day, the stock dropped 8.04 percent.  From March 20, 2021 to April 22, 2021, the total drop in value was 54 percent.  The Plaintiff and other Class members are claiming losses and damages due to the precipitous decline of Danimer’s market value securities.

EPA Announces Superfund Task Force Recommendations

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Environmental Protection Agency (EPA) Administrator Scott Pruitt assembled a task force to provide recommendations on how to restructure and improve the Superfund cleanup process. On July 25, 2017, the Task Force announced its recommendations. The Task Force Report to Administrator Pruitt identified 14 strategies and 42 specific recommendations to achieve the following five goals:

  1. Expediting cleanup and remediation;
  2. Reinvigorating responsible party cleanup and reuse;
  3. Encouraging private investment;
  4. Promoting redevelopment and community revitalization; and
  5. Engaging partners and stakeholders.

The Superfund Program governs the investigation and cleanup of the nation’s most complex hazardous waste sites. The National Priorities List (NPL) includes those sites that are of national priority among these sites because of known or threatened releases of hazardous substances. Currently, there are 1,336 sites on the NPL, of which 1,179 are privately owned sites and 157 are federal facilities. Sites on the NPL are in various stages of remediation.

The recommendations of the Superfund Task Force are meant to improve and expedite the process of site remediation and promote reuse of the remediated sites.

Administrator Pruitt also issued a memo outlining 11 specific actions that should be implemented expeditiously to improve the Superfund program. These include maximizing deletions and partial deletions of sites off the NPL.

The Task Force will be implementing the strategies and recommendations throughout the next year.

EPA Administer Assembles Task Force for Superfund Restructuring

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On May 22, 2017, EPA Administrator Scott Pruitt created a task force to improve the Superfund remediation process. He asked the Superfund task force to find ways to “utilize alternative and non-traditional approaches for financing site cleanups.” The task force’s recommendations were due by June 21, 2017. EPA has not yet announced its recommendations.

Creation of the task force was announced one day before the Trump Administration released its budget proposal for fiscal year 2018. The proposal would cut the EPA’s budget by 31.4 percent. In the proposed budget, Superfund spending is reduced by 25 percent — $330 million. Such drastic cuts may not be approved by Congress.

Future management of the Superfund program may rely on called the “Superfund Alternative Approach” to streamline efforts. Under the Superfund Alternative Approach sites are not added to the National Priorities List. However, the Alternative Approach uses the same standards and investigation process as sites addressed under the conventional approach. The Superfund Alternative Approach can’t be used at every site, just those with a willing, capable potential responsible party who will negotiate and sign an agreement with EPA to perform the investigation or cleanup. In addition, sites managed under the Alternative Approach are not eligible for federal cleanup funds. This process cannot be used to remove sites from the National Priorities List, which may frustrate companies working towards permanent resolution of remediation obligations.

Global Supply Chain under the Paris Agreement: The Relevance of Chemical & Product Regulations

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(Published in: Natural Resources & Environment, Volume 31, Number 3, Winter 2017 [Article PDF])

By Catherine K. Lin and Philip A. Moffat

Abstract

The Paris Agreement commits all parties to make “nationally determined contributions” (NDCs) via domestic laws to limit “the increase in the global average temperature to well below 2 °C above pre-industrial levels.” This article considers how this “bottom up” approach to limiting greenhouse gases (GHG) emissions can interact with the operations of global supply chains, as the latter can exert profound effect on local and national development.

Aided by the theory of Transnational Legal Process, we propose that resilient global supply chains can be had under NDCs, if the scope of certain existing chemical- and product-oriented environmental regulations that already apply to global supply chains can be expanded to cover, as appropriate, GHG emissions, energy use, water conservation, and/or use of natural resources key to mitigating climate change impacts. This could include: (a) the principles of “no data, no market,” mandated supply chain communication, and the authorization for or restriction of the placing of deleterious substances or products on the market as exemplified by the EU Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH);(b) the restriction of certain raw materials from finished products as is under RoHS; and/or (c) the requirement that due diligence be performed to trace the source of certain problematic raw material as exemplified by Section 1502 of the Dodd-Frank Act.

If so enacted, enterprises and their suppliers may be encouraged to shore up environmental compliance up and down the supply chain, strengthening its resilience even in the absence of formal legal requirements to do so by all DNCs. As such, we would be less concerned that the bottom-up approach under the Paris Agreement could lead to a “race to the bottom” by countries seeking to implement NDCs that favor development over environmental protection or be a “free rider” by delaying their own NDC implementation while awaiting for other countries to curb GHG emissions. Instead, resilient, self-governing global supply chains could become fora for a transnational process where global norms for domestic laws on GHG reduction could emerge from the Paris Agreement.

The full publication can be viewed by signing into the ABA’s website.

National Academy of Sciences propose framework on chemical alternatives assessments.

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A committee of the National Academy of Sciences’ National Research Council has released a proposal on decision-making in conducting alternatives assessments. The report, titled A Framework to Guide Selection of Chemical Alternatives and authored by the Committee on the Design and Evaluation of Safer Chemical Substitutions, also presents evaluations of existing frameworks and recommendations for implementation and future research. Suggested audiences and users of the report include regulatory agencies at every level, industry, organizations working for the adoption of safer chemicals, and developers of chemicals and chemical processes.

The recommended framework is 13 steps, with some steps and sub-steps treated as optional, and is designed for flexibility such that “certain steps are completed sequentially, in parallel, or iteratively, providing an opportunity for fit-for-purpose decision making.” The framework is summarized as follows (asterisks indicate optional activities):

  • Step 1: Identify Chemical of Concern
  • Step 2: Scoping and Problem Formulation
  • Step 3: Identify Potential Alternatives
  • Step 4: Initial Screening of Identified Alternatives
  • Step 5: Assess Physicochemical Properties
  • Step 6-1:Assess Human Health Hazards
  • Step 6-2: Assess Ecotoxicity
  • Step 6-3: Conduct Comparative Exposure Assessment
  • Step 7: Integration of Information to Identify Safer Alternatives
  • Step 8: Life Cycle Thinking
  • Step 9-1: Additional Life Cycle Assessment*
  • Step 9-2: Performance assessment*
  • Step 9-3: Economic assessment*
  • Step 10: Integrate Data and Identify Acceptable Alternatives
  • Step 11: Compare Alternatives*
  • Step 12: Implement Alternatives
  • Step 13: Research and Innovation*

The committee highlighted the following as the framework’s most important and unique elements:

  • a focus on scoping and problem formulation;
  • an increased emphasis on comparative exposure assessment;
  • increased use of physicochemical properties to assess human health and ecotoxicity hazards;
  • a two-tiered approach to evaluating chemical alternatives that includes health and ecotoxicity, followed by a consideration of broader impacts; and
  • recognition of the need for research and innovation.

Reminder: Fewer than Two Weeks Remaining to Complete Chemical Registrations in Turkey

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Foreign/Turkey:

There are fewer than two weeks remaining to complete registrations under Turkey’s new “Bylaw on the Inventory and Control of Chemicals.”  March 31, 2011, is the deadline for registering chemical substances imported or manufactured at or above 1 metric tonne per year.  Turkey’s Ministry of Environment and Forestry (MoEF) will use the information to establish a chemical inventory and regulate “priority chemicals.”  The bylaw is part of a suite chemical-related bylaws Turkey enacted in 2008 in preparation for joining the EU.  The other two bylaws concern safety data sheets (SDS) and the classification, labeling, and packaging (CLP) of dangerous substances and preparations.  A short summary of each bylaw is provided below.

Chemical Inventory and Control Bylaw

The registration requirements are set out in Articles 7 and 8.  Article 7 imposes substantial data requirements for substances imported or manufactured above 1,000 metric tonnes per year.  The information requirements for quantities below that threshold are minimal; they’re similar to the EU’s pre-registration requirements under REACh.  Turkey’s bylaw also provides exemptions similar to those available under REACh.  However, some of those are identified only in a guidance document currently available only in Turkish.  Lastly, registration is limited to Turkish entities, meaning that some companies will need to use an Only Representative (OR) to perform the registration, should one be required. 

SDS and CLP Bylaws

Turkey also enacted bylaws concerning the classification, labeling, and packaging of dangerous substances and preparations, as well as the preparation and distribution of Safety Data Sheets.  The classification and labeling requirements are based on the EU’s Dangerous Substances and Preparations Directives.  The SDS requirements are similar to the EU’s, but a person certified by Turkish authorities must prepare the SDS and submit it electronically to MoEF.  

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Additional information about Turkey’s new bylaws is available here.