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EPA Imposes Largest Ever TSCA Penalty for Violation of Lead Paint Regulations

December 21, 2020

On December 17, 2020, the U.S. Environmental Protection Agency (EPA) announced that it had entered into a Consent Decree with Home Depot U.S.A., Inc., to resolve alleged violations of the EPA’s Lead Renovation, Repair and Painting (RRP) Rule, 40 C.F.R. Part 745, at home renovation projects that Home Depot’s installation contractors performed across the country. Under the Consent Decree, which was lodged with the U.S. District Court for the Northern District of Georgia, Home Depot will pay a $20.75 million penalty, the largest civil penalty ever assessed for a settlement under the Toxic Substances Control Act; $750,000 of the penalty will be paid to Utah, $732,000 to Massachusetts, and $50,000 to Rhode Island.

The Consent Decree requires Home Depot to implement a comprehensive, corporate-wide program to ensure that its contractors performing renovation work are certified and trained to use lead-safe work practices (LSWP) to avoid spreading lead dust and paint chips at home renovation sites. Under the settlement, Home Depot will implement an electronic compliance system to verify that its contractors are properly certified, and it will require its contractors to use a detailed checklist to document LSWP compliance that will be provided to the customer. Home Depot will also conduct thousands of on-site inspections of prior renovation work sites to ensure compliance with LSWP. Where contractors did not comply with LSWP, Home Depot will perform lead dust hazard inspections and provide specialized cleaning where warranted.

Although EPA adopted the RRP Rule in 2008 and it became fully effective in 2010, it was not until the last several years that EPA has made a particularly strong push to enforce it. With a 2016 Sears Home Improvement Products consent decree and multiple enforcement actions against both large and small renovation contractors, EPA is sending a strong message that compliance with the RRP Rule is not optional, and enforcement is a very high priority.

Though the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601-2629, has been around since 1976 and the Consumer Product Safety Commission banned lead-based paints from residential use in 1978, it was not until 2008 that EPA issued the RRP Rule specifically to address lead-based paint (LBP) hazards through required work practices for renovation activities in “target housing” (residential structures built before 1978) and “child-occupied facilities.”

EPA promulgated the RRP Rule to ensure that individuals conducting renovation, as opposed to abatement, activities in target housing and child-occupied facilities are properly trained and certified, that RRP training programs are accredited, and that renovation activities that disturb LBP are conducted according to effective and safe work practice standards. Required LSWP include occupant protection through containment of work areas, plastic sheeting over doors, windows, floors, and the ground surface for exterior renovations, and dust-control measures, among other things. Additionally, renovators must post warning signs and follow specific cleanup requirements upon the completion of the work. The RRP Rule also prohibits certain work practices that present a heightened risk of exposure, such as open-flame burning or torching of LBP, and the removal of LBP through high-speed abrasion, such as power sanding and grinding without the use of high-efficiency particulate air (HEPA) vacuums to collect lead dust.

Another important aspect of the RRP Rule that has been a focus of both EPA and state enforcement is the rule’s documentation requirements. The rule requires reports certifying a determination that LBP was not present, and if it was present, records of an inspector or risk assessor showing that testing was done with an EPA-recognized test kit or laboratory paint-chip testing. Also required is proof of delivery to, or acknowledgement of receipt by, building owners or occupants of EPA’s “Renovate Right” pamphlet. The acknowledgement of receipt must be signed by the homeowner prior to, but no more than 60 days before, commencement of work. For multi-family housing, the RRP Rule requires signed, dated statements regarding notifications to occupants of work in common areas. Renovators also must document compliance with the required work practice standards. These records must be kept for a minimum of three years after the renovation is completed.

It is important to remember that many states and tribes may have their own, more-stringent RRP programs. The National Center for Healthy Housing maintains a listing of states with authorized RRP programs to more readily identify and comply with their different and possibly more stringent requirements.

Civil penalties for RRP Rule violations under TSCA can be significant. Even for simply failing to maintain required documents, penalties can be up to $40,576 per violation, per day. 15 U.S.C. § 2615(a)(1); 85 Fed. Reg. 1751 (Jan. 13, 2020). There also are potential criminal penalties under TSCA for “knowing violations,” with penalties of up to $50,000 per violation per day, or imprisonment for not more than one year, or both, in addition to or in lieu of civil penalties. Id. § 2615(b)(1). “Knowing endangerment” under TSCA carries penalties of up to 15 years imprisonment or a fine of not more than $250,000, or both, and an organization convicted of knowing endangerment may be subject to a fine of not more than $1,000,000. Id. § 2615(b)(2)(a).

Lead exposure has long been known to be linked to a host of adverse health effects, and children are most at risk of permanent harm from lead exposure. The adverse effects of lead toxicity during childhood include a variety of sensory, motor, cognitive and behavioral impacts. Children six years old and under are most at risk from exposure to LBP and, because their bodies are still growing, they tend to absorb more lead than adults.

Perhaps the most important thing a company can do to ensure compliance with the RRP Rule, and any other environmental programs, is to establish and maintain a culture of compliance. Of course, establishing such a culture requires strong support from top management. As was the case for so many years with the quality management function, environmental performance and compliance can’t take a back seat to production and sales. Not only are the potential monetary and criminal penalties of non-compliance a deterrent, but protecting workers and the public from the hazards of LBP is an essential part of engaging in the renovation business.

Davis Graham & Stubbs attorneys have substantial experience dealing with EPA and state investigations of LBP-related TSCA and state law compliance. Please contact John Jacus or Dean Miller if you have questions about LBP-related environmental compliance requirements for renovations and remodeling.

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