Michigan Supreme Court reviews PFAS drinking water rules case

By Carolyn Muyskens
Law360 (February 5, 2024, 7:30 PM EST) — The Michigan Supreme Court has agreed to review a decision invalidating regulations on so-called forever chemicals in drinking water because of a missing cost analysis, saying Friday that it would hold oral arguments on the state’s appeal.
The justices told the state and 3M Co., the company that brought the legal challenge to the PFAS rules, that they were interested in whether the Michigan Department of Environment, Great Lakes and Energy failed to comply with the rulemaking process when it set new limits on per- and polyfluoroalkyl compounds.
EGLE and 3M Co. were directed to brief the justices on whether the state violated Michigan’s Administrative Procedures Act “by issuing new rules changing the permissible levels of per- and polyfluoroalkyl substances in drinking water without preparing a regulatory impact statement that included a sufficient ‘estimate of the actual statewide compliance costs of the proposed rule on businesses and other groups,”” according to Friday’s order.
The litigation stemmed from regulations Michigan’s environmental agency issued in 2020 setting limits on the concentrations of seven PFAS-family compounds in drinking water.
3M, a major manufacturer of PFAS, challenged the rules because they triggered an automatic update to the state’s groundwater cleanup rules to match the chemical limits in the new drinking water rules. 3M said that because the state did not analyze how the more stringent groundwater requirements would affect businesses that are forced to clean up PFAS on their properties, the drinking water regulations violated the APA.
A Michigan Court of Claims judge sided with 3M in 2022 and found the rules were invalid, but stayed the effect of his ruling while the state appealed.
The state took the case to the high court after a split Michigan Court of Appeals panel affirmed the ruling in August, finding that the state should have looked into how businesses’ groundwater cleanup obligations would be affected by the drinking water rules.
Scott Dean, a spokesperson for EGLE, said the department “appreciates the Supreme Court’s decision” to review the case.
“We remain confident that our rulemaking process for these standards was valid and are committed to ensuring that these state standards stay in place to protect human health and the environment,” Dean told Law360 Monday in an email.
In its high court application for leave to appeal, the Michigan department argued that the “plain language” of the APA requires the agency to supply estimates only of costs directly related to the drinking water rules at issue, not costs that might flow indirectly from the rules.
The state warned that the PFAS decision, if left to stand, would create a “pathway” for others to challenge regulations they dislike.
“No agency has the ability to predict all the costs that will or might flow from a proposed rule. Now companies like 3M will be able to fight any new regulation by dreaming up costs not addressed by the agency during the rulemaking process. The majority’s ruling has set a standard that no agency will be able to meet,” EGLE said in its application.
3M said in a brief opposing high court review of the case that the automatic changes to the groundwater cleanup rules, which are required by Michigan’s Natural Resources and Environmental Protection Act, were “direct effects” of the drinking water changes, so they must be included in any impact statement.
“3M agrees with the previous rulings from the trial court and Court of Appeals on the matter and will continue to defend those rulings on appeal,” Sean Lynch, a spokesperson for the company, told Law360 Monday.
3M is represented by Amy M. Johnston and Joseph M. Infante of Miller Canfield Paddock & Stone PLC and Jayni A. Lanham and Nessa Horewitch Coppinger of Beveridge & Diamond PC.
The Michigan Department of Environment, Great Lakes and Energy is represented by Richard Kuhl of the Michigan Department of Attorney General.
The case is 3M Co. v. Michigan Department of Environment, Great Lakes and Energy, case number 166189, in the Michigan Supreme Court.
–Additional reporting by Parker Quinlan and Peter McGuire. Editing by Peter Rozovsky.