The Nikola case stands at the intersection of several emerging risk areas in the automotive industry. For example, as regulators in the U.S. and European Union continue to ratchet up the pressure on climate change goals, and environmental, social and corporate governance, boards need to be extra careful about their companies’ commitments to going carbon neutral and the efficacy of electric vehicles.
That means putting clear plans and metrics in place to ensure appropriate follow-through and effective communications with investors so that they are well-informed about the caveats, risks and limitations.
This Sidley Update provides key takeaways from the most recent “The Enforcement Angle” episode as part of the Environmental Law Institute’s People Places Planet podcast. The episode is hosted by Justin Savage, partner and global co-leader of Sidley’s Environmental practice, and Ranah Esmaili, who recently joined the firm as a partner in the global Securities Enforcement and Regulatory practice from the SEC’s Asset Management Unit within the Division of Enforcement. Justin and Ranah talk with Kelly Gibson, director of the Philadelphia Regional Office for the SEC and leader of the Climate and ESG Task Force within the SEC’s Division of Enforcement.
Read more here.
Historically, the emissions standards for mobile sources promulgated by the U.S. Environmental Protection Agency (EPA) have been viewed as more ambitious than European Union (EU) standards. The United States’ stringent enforcement of mobile source emission standards may result in significant financial penalties; extensive injunctive relief, such as recalls and high-cost mitigation projects; corporate compliance requirements; and in some cases, criminal indictment.
On the other side of the Atlantic, in the EU, mobile emissions compliance regulations are becoming more robust. In particular, the EU appears to be adopting a stricter approach on emissions through a growing body of case law on the interpretation and application of existing emissions compliance regulations. In a judgment on 17 December 2020, in CLCV and Others, the Court of Justice of the European Union (Court) adopted a potentially broad interpretation on the definition of defeat devices and appeared to limit the scope of exceptions for their use in vehicles sold, registered, or put into service in the EU.1 This judgment is likely to set the benchmark for other proceedings on the admissibility of defeat devices in the EU.
Notably, there are at least six cases pending before the Court on mobile source emissions and the concept of defeat devices for light-duty passenger and commercial vehicles under Regulation (EC) No 715/2007 (Regulation).2
Earlier this week President Trump issued an executive order aimed at bolstering economic recovery as businesses reopen. This has potential for marked effects on environmental enforcement in light of how the Environmental Protection Agency and the Department of Justice have already been adapting environmental priorities in the face of the pandemic. (more…)
On February 18, 2020, a group of states and a national trade union filed separate petitions seeking administrative reconsideration of the United States Environmental Protection Agency’s (EPA or Agency) recently finalized Clean Air Act Risk Management Plan (RMP) reconsideration rule (the Reconsideration Rule). The Reconsideration Rule became effective on December 19, 2019, and rescinds numerous provisions of the Obama administration’s January 2017 amendments to EPA’s RMP regulations under the Clean Air Act (the Amendments).
Earlier this summer, the Department of Justice (DOJ) and Environmental Protection Agency’s (EPA) criminal office announced criminal charges against employees of an oil and gas operation for tampering with and disabling pollution controls and on-board diagnostic (OBD) systems on the company’s truck fleet. DOJ and EPA charged five employees of Rockwater Northeast LLC, a company that services the hydraulic fracturing industry, for modifying emission control and OBD systems on approximately 30 of the company’s heavy-duty diesel trucks. (more…)
The U.S. District Court of the District of Massachusetts dismissed, in part, an environmental group’s challenge to a Boston Harbor terminal’s stormwater permit, claiming that the permit fails to protect the group’s members from future harm from climate change. The Conservation Law Foundation (CLF) filed a Clean Water Act and Resource Conservation and Recovery Act citizen suit in September 2016. Among other things, they argued the Everett Terminal’s Stormwater Pollution Prevention Plan, Spill Prevention, Control and Countermeasures Plan, and Facility Response Plan failed to account for petroleum product discharges that would occur in the future from sea level rise, storm surges, severe weather events and flooding caused by climate change. (more…)