1. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. ABA Section of Litigation – Environmental Litigation Committee At the Forefront of Environmental Litigation -- Environmental Federalism Trends Washington, D.C. July 23, 2015 by Charles M. Denton

2. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. ENVIRONMENTAL FEDERALISM TRENDS 2

3. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. Environmental Federalism Trends -- Overview U.S. EPA “Next Generation” Compliance/Enforcement Strategy State Environmental Initiatives (ECOS)

4. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy EPA’s Next Generation Compliance approach consists of 5 interconnected components designed to improve the effectiveness of our Federal environmental compliance program: Design regulations and permits that are easier to implement, with a goal of improved compliance and environmental outcomes. Use and promote advanced emissions/pollutant detection technology so that regulated entities, the government, and the public can more easily “see” pollutant discharges. Shift towards electronic reporting to help make environmental reporting more accurate, complete, and efficient while helping EPA and co-regulators better manage information, improve effectiveness and transparency. Expand transparency by making information more accessible to the public. Develop and use innovative enforcement approaches (e.g., data analytics and targeting) to achieve more widespread compliance. Source: EPA Compliance (1/20/2015)

5. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy Source: EPA Strategic Plan 2014-2017 (10/2014)

6. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy -- (1) More Effective Regulations and Permits Regulations and permits that are clear, as easy to implement as possible, and that contain self-reinforcing drivers for better performance help to move toward improved compliance as the “default” option. For example, regulated facilities can take steps to monitor their own performance to prevent violations. New technology can help companies find pollution that was “invisible” and monitors can transmit warnings to facility managers so they can fix a problem before a violation occurs. Real time information to communities and/or market incentives can help “inspire” facilities to improve compliance.

7. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy -- (2) Advanced Emissions/Pollutant Detection Technology EPA and others are starting to use new monitoring equipment that allows air pollution leaks to be seen and reported, water quality data to be sent using cellphone technology, and near real time data to be posted on the internet. For example, EPA is now using infrared cameras in inspections to find emissions leaks that would otherwise be very difficult to detect. EPA has deployed solar-powered buoys to collect and transmit water quality data every 15 minutes.

8. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy -- (3) Electronic Reporting For the user, these systems offer speed, convenience, expanded information choices and filing capabilities. For government, they offer the ability to increase transparency and to improve ability to spot pollution and compliance issues and respond quickly to emerging problems. EPA policy now states that e-reporting is the default assumption for new regulations. E-reporting is not just converting paper to electronic; it guides users through the reporting process with integrated compliance assistance and data quality checks. From a compliance perspective, e-reporting will allow regulated entities, government agencies and the public to more quickly identify violations, and then more quickly address them. For example, Ohio’s wastewater program mandated electronic reporting for discharge monitoring reports (DMRs) and has found that this has significantly reduced violations, reduced data errors, and reduced the staff needed to run the program.

9. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy -- (4) Transparency By expanding transparency we can provide facilities and the public with better information on pollution releases, pollution sources, environmental conditions, and the performance of regulated sources and the government. Transparency improves compliance by helping facilities understand their environmental impact and allowing the community to better understand and act on this information to hold facilities accountable and advance environmental justice. Data tied to geographic information can also provide insights to ambient environmental conditions and significant pollutant loadings, sometimes allowing access to this data in real time. For example, an EPA settlement requires a water utility to display a warning light near its outfall that goes on whenever a sewer overflows into the local river, allowing people to avoid water contact when pollution levels are higher. EPA is testing the Village Green, a solar- powered air pollution and meteorological monitoring station integrated into a neighborhood park bench, which provides ambient air quality information online and via mobile app. This could include making facility environmental performance information and real-time monitoring data available on ECHO or a mobile app, or at a critical place in the community.

10. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. “Transparency” Example: ECHO Hazardous Waste Dashboard Fiscal Year 2014 Agency EPA Source: http://echo.epa.gov/trends/comparative-maps-dashboards/state-air-dashboardhttp://echo.epa.gov/trends/comparative-maps-dashboards/state-air-dashboard

11. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Compliance Strategy -- (5) Innovative Enforcement EPA will be able to better identify serious violators, ensure the integrity of electronic reporting, and more effectively and efficiently track compliance with settlements, while supporting new approaches to improve compliance. The potential for two-way communication via electronic reporting makes new compliance approaches possible. For example, regulatory agencies may be able to electronically provide targeted compliance assistance based on information a facility provides in its electronic reports. Information on compliance through electronic reporting allows EPA to experiment with approaches that will improve compliance at facilities beyond just those that receive enforcement attention. Transparency strategies, such as innovative ways to inform the public of serious violations, can also improve compliance when thoughtfully applied to the right problems. Advanced monitoring, electronic reporting, and transparency are being incorporated into civil and criminal case resolutions, making it easier to know if facilities are complying and the public is protected, and providing more information to the communities affected. Enforcement cases can also provide opportunities to test new technology and approaches that can provide better protection and, in some cases, save money for complying facilities. EPA Updated SEP Policy (3/10/2015).

12. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” Innovative Enforcement Settlement Highlights U.S. v. Titanium Metals Corp. (Henderson, NV) -- TSCA/PCBs U.S. v. AL Solutions (New Cumberland, WV) -- CAA/EPCRA U.S. v. Sunoco (Philadelphia, NJ) -- CAA U.S. v. Tyson Foods, Inc. (Washington, DC) -- CAA U.S. v. Roquette America (Keokuk, IA) -- CWA U.S. v. BP Whiting (Whiting, IN) -- CAA U.S. v. Metropolitan St. Louis Sewer District (St. Louis, MO) -- CWA U.S. v. Chevron Puerto Rico, LLC (Puerto Rico) -- RCRA U.S. v. BP Exploration (North Slope, AK) -- PHMSA U.S. v. Murphy Oil USA, Inc. (Meraux, LA; Superior, WI) -- CAA

13. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. U.S. EPA “Next Generation” References: http://www2.epa.gov/sites/production/files/2 014-09/documents/next-gen-compliance- strategic-plan-2014-2017.pdf http://www2.epa.gov/sites/production/files/2 014-09/documents/next-gen-compliance- strategic-plan-2014-2017.pdf http://www2.epa.gov/sites/production/files/2 015-01/documents/memo-nextgen- useinenfsettlements.pdf http://www2.epa.gov/sites/production/files/2 015-01/documents/memo-nextgen- useinenfsettlements.pdf

14. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. State Environmental Initiatives (ECOS) Environmental Council of States (ECOS) Priorities: Environmental federalism Delegation of federal environmental laws Preemption Budgets and financial support Federal government liabilities

15. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. State Environmental Initiatives (ECOS) -- Environmental Federalism States have further demonstrated their commitment to environmental protection by taking responsibility for 96% of the primary environmental programs which can be delegated to states. Federal financial support to implement environmental programs delegated to the states has declined since 2005. States currently perform the vast majority of environmental protection tasks in America, including 96% of the enforcement and compliance actions; and collection of more than 94% of the environmental quality data currently held by the U.S. Affirms that expansion of environmental authority to the states is to be supported, while preemptions of state authority, including preemption that limits the state’s ability to establish environmental programs more stringent than federal programs, is to be opposed. Federal government should intervene in such state programs where required by court order or where a state fails to enforce federal rules, particularly involving spillovers of harm from one state to another. Affirms that the federal government should be subject to the same environmental rules and requirements, including the susceptibility to enforcement that it imposes on states and other parties. The function of Federal EPA is, working with the states, largely to set goals for environmental accomplishment and, to the maximum extent possible, the means of achieving those goals should be left primarily to the states. Source: Excerpts from ECOS Resolution (March 18, 2015)

16. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. State Environmental Initiatives (ECOS) -- ECOS Priorities Examples U.S. EPA Clean Power Plan Proposal, and implementation of Clean Air Act Section 111(d) (greenhouse gas emissions reductions) Waters of the U.S. rulemaking and potential legislation Coal combustion residuals from electric utilities (EPA 2014 Final Rule) EPA Consent Decrees which settle citizens suits without state participation Federal appropriations/budgets, including State and Tribal Assistance Grants (STAG), and financing for water and wastewater infrastructure Hydraulic fracturing Toxic Substances Control Act (TSCA) reform (including confidential business information, preemption, and management of PCB wastes) CERCLA Sovereign Immunity Waiver for Federal Facilities Natural resources damages/restoration at DOE facilities

17. CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP. Charles M. Denton Barnes & Thornburg LLP 171 Monroe Avenue, N.W., Suite 1000 Grand Rapids, MI 49503 Phone: (616) 742-3974 cdenton@btlaw.com