(Source: MIRS.news, Published 08/23/23) The Department of Environment, Great Lakes and Energy (EGLE)’s new set of rules regulating permissible levels of PFAS in drinking water were ruled invalid by the Court of Appeals on the grounds that the required regulatory impact statements didn’t properly account for total costs to businesses.
The opinion affirmed a prior Court of Claims ruling that EGLE violated Section 45 of the Administrative Procedures Act of 1969, which requires agencies to prepare a regulatory impact statement (RIS) with estimates of how much compliance with proposed rule changes will cost businesses and other groups.
Plaintiff 3M Company, manufacturer of abrasives and consumer-electronics components, sued EGLE for rules regulating permissible levels of per-and polyfluoroalkyl substances (PFAS) in drinking water, which it said didn't account for the total cost of compliance.
The opinion, authored by Judge Christopher Murray, affirmed that the October 2019 RIS submitted by EGLE did not account for the full extent of the cost to comply with new standards, as it only accounted for drinking water standard changes, and not the resulting changes to groundwater standards.
The RIS identified the primary costs to state and local government units as arising from sampling and monitoring requirements, along with the “installation and operation of treatment systems where PFAS exceeded the maximum contaminant levels.”
Regarding costs imposed on businesses and groups, EGLE addressed only businesses that operated their own water supplies, and estimated a $300 to $600 sampling cost per sample, with $600 estimated if the business or group hired an outside contractor.
A second RIS prepared the next month was revised to recognize that surface water standard changes would also alter the standards for groundwater cleanup, but did not factor that into the updated cost, and the new rules were made effective Aug. 3, 2020.
3M subsequently filed suit seeking declaratory and injunctive relief because EGLE had not fully accounted for all costs estimated to comply with the related groundwater-cleanup standards, arguing that the RIS was deficient, and since EGLE had not complied with requirements, the drinking water rules were invalid.
Murray wrote that the Court of Appeals sided with 3M because “whenever EGLE sets drinking water standards, it is also setting groundwater cleanup criteria.
“Despite this, EGLE refrained from providing compliance cost estimates for the new groundwater cleanup criterion in the RIS it prepared for the new drinking water standards,” Murray wrote, “arguing that … (state law) only requires it to estimate costs of the proposed rule, (and) it only needed to provide a cost estimate for businesses and other groups to comply with the drinking-water rule. It did not need to provide an estimate of the costs that businesses and other groups might incur as a result of the groundwater-cleanup provisions.”
Murray said EGLE’s argument that it was not required to estimate the costs to businesses that would necessarily occur because it lacked the necessary information to make an estimate “does not save the day as the applicable statutory provisions say otherwise.”
