Our team at Squire Patton Boggs continues to track environmental justice matters as the landscape evolves according to Biden Administration executive orders. We have previously posted on environmental justice considerations in affordable housing and have updated readers on environmental justice initiatives under the Biden Administration. This post explores how environmental justice considerations under Title VI of the Civil Rights Act of 1964 (Title VI) can impact environmental permitting decisions and, at times, business viability.
Title VI prohibits recipients of federal funding, such as states, universities and local governments, from discriminating based on race, color, or national origin in any program or activity. Permitting agencies that receive federal funding to carry out US EPA-approved programs are subject to Title VI. Any person can file a Title VI complaint with US EPA. There are regulations that govern the investigation and review process. The majority of such are found at 40 C.F.R. §§ 7.115, 7.120, and 7.130.
Historically, US EPA appeared to establish definitive environmental quality and permit limitation-based standards when reviewing Title VI complaints. In Select Steel Corporation (Select Steel), a complaint alleged that the Michigan Department of Environmental Quality’s issuance of a Clean Air Act Prevention of Significant Deterioration permit for a proposed steel recycling mini-mill in Genesee Township (near Flint) would lead to a discriminatory impact on minority residents and that the department’s permitting process was conducted in a discriminatory manner. The US EPA’s Office of Civil Rights completed review and determined the facility did not pose an adverse effect on the community and, therefore, there could be no civil rights violation. US EPA’s decision essentially established that construction of a stationary source that will not cause a violation of health-based NAAQS creates a “rebuttable presumption” that no adverse impacts are caused by the environmental permit and, thus, there is no civil rights violation. Select Steel was decided in 1998.
However, the landscape of Title VI investigations changed somewhat in 2017 when US EPA’s External Civil Rights Compliance Office Compliance Toolkit (Toolkit) was published. The Toolkit was published as “clarification of existing law and policy intended to provide guidance to promote and support EPA recipients’ compliance with federal civil rights laws.” According to the Toolkit, “compliance with environmental laws does not necessarily constitute compliance with federal civil rights laws.” In practice, the Toolkit eliminated Select Steel’s “rebuttable presumption” and can now require US EPA to look beyond compliance with federal environmental laws during Title VI investigations. The Toolkit creates less certainty for future permitting matters subject to Title VI claims.
One recent and notable illustration of the uncertainty that now exists in the environmental justice landscape comes from a permitting matter involving Reserve Management Group (RMG) and the relocation of a 100+ year-old scrap metal processor and recycler (General Iron) located in Lincoln Park, Chicago. Lincoln Park is said by some to be one of the most affluent neighborhoods in Chicago. Its demographics are majority Caucasian. In April 2019, a zoning variance and special permit were approved to move General Iron to the city’s extreme southeast side—an area that is historically heavy industrial and is also in proximity to majority Black and Hispanic communities. Allegations arose that the City of Chicago was involved in efforts to relocate General Iron from Lincoln Park. In fact, there was a Term Sheet agreement signed by Chicago, General Iron, and RMG that pertained to cessation of metal recycling operations in Lincoln Park and relocation to the heavy industrial site controlled by RMG at 11600 South Burley Avenue. RMG has operated facilities at this site for decades. Civil rights groups became involved in litigation regarding the matter. Meanwhile, RMG completed construction of the relocated facility.
While RMG’s permit application to operate the new large recycling facility in the southeast side was pending before the Chicago Department of Public Health (CDPH), correspondence arose between Mayor Lori Lightfoot and US EPA Administrator Regan regarding the matter. Administrator Regan recommended that Chicago “complete an environmental justice analysis, such as a Health Impact Assessment, to meaningfully consider the aggregate potential health effects of the proposed RMG facility on the southeast area of Chicago” prior to making a permit decision. This suggestion led Chicago to immediately suspend the recycling facility permit process while CDPH conducted a Health Impact Assessment (HIA). The duration of the HIA process was about nine months. Pursuant to the completed HIA, CDPH concluded it should deny the RMG permit application to operate a large recycling facility in the selected location on the Southeast Side. This decision was made in February 2022, after RMG had expended significant resources to complete construction of the relocated facility.
It appears clear from the language of the HIA that Chicago’s permitting decision was guided by Title VI considerations. Of additional note, in July 2022, the US Department of Housing and Urban Development (HUD) sent a letter to Chicago with findings of noncompliance under Title VI on the part of the City based on its own actions with regard to the relocation of the General Iron facility. While HUD acknowledged Chicago’s denial of the final permit, it also noted that RMG had appealed the permitting decision, so final disposition of the permitting decision was still pending. HUD determined that the factors by which discrimination may be proven supported “a finding that the City’s goal of relocating the Facility and the manner in which the City pursued this goal were shaped by the race and national origin of the Southeast residents as compared to that of the Lincoln Park residents.” Thus, HUD concluded Chicago was in noncompliance with Title VI.
This recent RMG permitting decision provides considerable perspective on the changing environmental justice landscape and what it could mean for future permitting decisions and resultant business viability. From a permitting standpoint, changing US EPA perspectives and the qualitative nature of Title VI review actions may bring extended timelines and uncertainty to permit actions subject to environmental justice concerns or claims. It is certain there will be increased attention given to environmental justice by permitting agencies that receive federal funding. This will require individual permit drafters to pay closer heed to the same considerations. It is also possible that HIAs will become a standard requirement in certain types of permit decisions. Applying an HIA effort to any permitting process will bring additional uncertainty to the permit issuance determination, especially since literature regarding HIAs shows the content of an HIA to have significant qualitative aspects. Permit applicants hoping to avoid complications arising from environmental justice considerations, to the extent possible, must anticipate actions like those illustrated above and plan accordingly. Addressing environmental justice concerns before they are raised by local permitting agencies or the US EPA could aid in resolving bona fide environmental justice concerns while protecting permit applicants from unanticipated delay and expense. We will continue to monitor future environmental justice initiatives. Please reach out if you have any questions, would like more resources on this subject, or wish to discuss the topic further.