Alert 04.16.20
Construction During COVID-19: Is It Essential?
There is no “one-size-fits-all” approach to how governments are handling construction.
Alert
Alert
04.16.20
The coronavirus (COVID-19) pandemic has been credited with improved air and water quality as America shelters in place, reducing its emission and discharge footprint. This unanticipated benefit, however, overlooks the numerous environmental problems that Californians were addressing prior to the advent of the pandemic. For example, timely progress on cleanup at numerous contaminated properties could be jeopardized if environmental contractors, the backbone of site cleanup, are forced to abandon the field. In response to the COVID-19 pandemic, state and local authorities throughout California have issued a cascade of “stay-at-home” orders prohibiting residents from leaving their homes, except to perform certain “essential activities.” While these orders further important public health goals, their brevity has created uncertainty as to which activities qualify as “essential” and are thus exempt from the stay-at-home mandate. Since these directives are likely to remain in place for the foreseeable future, it is imperative that California businesses understand how these restrictions affect their environmental compliance obligations.
In particular, many businesses have raised questions regarding the implications of the shelter-in-place restrictions on fieldwork performed by environmental contractors. Specifically, do the statewide and local orders allow environmental contractors to engage in monitoring, investigation, remediation, or other work required for compliance with administrative orders and permits under state and federal environmental laws? Are contractors allowed to perform voluntary work to support cleanup activities to remediate a contaminated site under development cleanup agreements with the state or private parties; to advance new construction; or to conduct site inspections to support Phase I Environmental Site Assessments for commercial real estate transactions?
The answers to these questions depend on the swiftly changing mandates of the local jurisdictions in which environmental contractors are operating. Many local stay-at-home orders include exceptions for “essential businesses” that are likely broad enough to include most of the above activities. However, because COVID-19 response directives—at the local, state and federal level—are dynamic and evolving on a daily basis, it is imperative for businesses to stay up to date on the particular local requirements applicable to their operations. Where an environmental activity is required by contract, the affected party should carefully assess the language of applicable state and local directives, along with the contract at issue, focusing on any notice, delay, extension of time, and force majeure clauses. The following survey covers exceptions to the stay-at-home directives in several local California jurisdictions that may apply to the activities of environmental contractors.
Statewide Executive Order
On March 19, 2020, Governor Gavin Newsom issued Executive Order No. N-33-20, directing all California residents to stay at home, except as needed to perform certain “essential services” needed to maintain critical infrastructure. The State Public Health Officer’s list of “Essential Critical Infrastructure Workers” identifies essential service sectors and employees exempt from the statewide stay-at-home mandate.. While the list does not specifically mention environmental contractors, it identifies several categories of essential business sectors and services that potentially encompass work performed by environmental contractors pursuant to agency enforcement orders, permits or voluntary cleanup agreements:
This is only a partial listing; California businesses are urged to consult the full list to determine whether their operations may fall within one of the “Essential Critical Infrastructure” functions.
To the extent that fieldwork performed by environmental contractors or consultants supports the above activities, it may be considered “essential” and therefore exempt from the statewide stay-at-home order. For example, environmental consultants or contractors may fall within the category of workers “who support hazardous materials response and cleanup,” and/or the class of “service providers who provide services that are necessary to maintaining the safety, sanitation, construction, material sources, and essential operation of construction sites and construction projects,” including those who “ensure the effective removal, storage and disposal of solid waste and hazardous waste.” Additionally, where fieldwork is necessary to support compliance with permit requirements or agency orders, it may fall within the order’s broad exemption for “professional services,” including “legal or accounting services, when necessary to assist in compliance with legally mandated activities and critical sector services.”
Local Stay-at-Home Orders
Many local jurisdictions in California have issued their own COVID-19 orders adopting additional or different categories of “essential activities” or “essential businesses” that may apply to environmental contractors. While there is significant overlap between the statewide and local requirements, the local requirements are generally more restrictive than the statewide order.
The following survey covers local county-level stay-at-home requirements in the six major Bay Area Counties—Marin, San Francisco, San Mateo, Santa Clara, Contra Costa, and Alameda—as well as Los Angeles, San Bernardino, Riverside, Orange and San Diego Counties. Some of these jurisdictions have not issued their own stay-at-home orders and have instead adopted the requirements of the statewide Executive Order. For example, the Riverside County Health Officer issued an order on April 6 prohibiting most public and private gatherings. The order does not define “essential activities,” but it incorporates the statewide executive order by reference. Similarly, an April 8 order by the San Diego County Health Officer defines “essential business” as any business or activity included on the State Public Health Officer’s list of “Essential Critical Infrastructure Workers.” Most of the orders declare failure to comply with the stay-at-home requirements to be a misdemeanor punishable by fine, imprisonment or both. In some cases, municipal directives within these counties may be more stringent than the county-level directives described here; therefore, we urge businesses to review the municipal directives applicable to their specific activities.
A review of the county-level stay-at-home orders suggests three broad categories of exempt activities that potentially include fieldwork performed by environmental contractors:
1. Professional Services in Support of Legally Mandated Activities
Most local California stay-at-home orders include exceptions for certain “professional services” to support legally mandated activities. For example, the nearly-identical “shelter-in-place” orders issued by the six most populous Bay Area counties on March 16, and updated on March 31, identify certain “professional services” as “essential,” including “legal, notary, or accounting services, when necessary to assist in compliance with non-elective, legally required activities.” The updated “Safer at Home” order issued by the Los Angeles County Department of Public Health on April 10 (applicable in all parts of the County except for Long Beach and Pasadena, which are not within the County’s public health jurisdiction) similarly defines “essential businesses” to include “[p]rofessional services, such as legal, payroll, or accounting services, when necessary to assist in compliance with legally mandated activities, and the permitting, inspection, construction, transfer and recording of ownership of housing, including residential and commercial real estate and anything incidental thereto....”
Although these provisions do not specifically mention environmental services as essential to supporting legally-mandated activities, the language of the exceptions is likely broad enough to include monitoring and sampling activities carried out by environmental contractors for the purposes of compliance with facility permits or administrative enforcement orders issued by state or federal environmental agencies. Absent clearer guidance from state and local authorities, it is helpful to examine the plain meaning of “legally mandated.” Merriam-Webster’s Dictionary defines “legally” as “in a legal manner; in accordance with the law,” and defines “mandated” as “officially required.” Accordingly, it is reasonable to interpret “legally mandated” as “officially required in accordance with the law.” It would appear that fieldwork in support of facility permit requirements or administrative orders are “officially required in accordance with the law,” absent further State or local orders suspending or adjusting such legal obligations during the operation of the stay-at-home orders.
Supporting this conclusion, at least by inference, is recent federal guidance. On April 10, the U.S. EPA issued interim guidance to its regional offices regarding new and ongoing site fieldwork during the COVID-19 pandemic. The guidance applies to sites where EPA is lead agency or has direct oversight over the cleanup work, including actions under Superfund, Resource Conservation and Recovery Act (RCRA), Oil Pollution Act, Underground Storage Tank Program, and others. The guidance states that decisions regarding continuing, reducing, or pausing fieldwork during the COVID-19 pandemic should be made on a “case-by-case basis” according to several site-specific factors. For example, EPA regional offices should consider whether to continue site operations or secure the site pending resolution of the public health threat, “[e]specially in areas where federal, state, tribal, or local health declarations are in effect due to COVID-19.” The interim guidance also encourages parties to consult the “applicable enforcement instrument” governing the site, including provisions allowing for schedule adjustments, and force majeure provisions. Reading between the lines, it is clear that EPA considers the environmental consulting industry, while subject to reasonable limitation depending on the fact pattern, “open for business.”
The various oversight agencies in California have not tapped the brakes on environmental obligations, including site investigation and remediation. For example, on March 20, the State Water Resources Control Board issued a notice indicating that it considers compliance with permitting requirements and administrative orders to be an “essential activity” exempt from the state and local stay-at-home orders. The notice states that “timely compliance by the regulated community with all Water Board orders and other requirements (including regulations, permits, contractual obligations, primacy delegations, and funding conditions)” is generally considered to be “within the essential activities, essential governmental functions, or comparable exceptions to shelter-in-place directives provided by local public health officials.”
On March 20, the Chair of the California Air Resources Board (CARB) issued a similar bulletin stating that the agency is following Department of Public Health guidance and emphasizing that the agency will “ensure business continuity,” including “proposing new and implementing existing regulations [and] enforcement.” The bulletin also notes: “CARB’s regulations continue to be in effect and deadlines apply.” The CARB notice does not mention the effect of the stay-at-home orders on environmental fieldwork, but suggests that relief generally will not be provided for noncompliance.
The California Environmental Protection Agency (CalEPA) has not issued statewide guidance comparable to that issued by the U.S. EPA regarding environmental fieldwork during the COVID-19 pandemic. However, on April 15, 2020, CalEPA released a brief statement noting that the agency “will continue to respond, investigate, and—when necessary—take action on complaints related to environmental non-compliance,” and that “ongoing clean-up of contaminated sites will be prioritized to abate or prevent an imminent threat to public health or the environment.” The statement also notes that extensions of regulatory deadlines, “may be warranted under clearly articulated circumstances,” but regulated entities that cannot meet a specific regulatory requirement due to COVID-19 restrictions must contact the appropriate CalEPA agency as early as possible before falling out of compliance.
On April 15, 2020, the South Coast Air Quality Management District (SCAQMD) issued a similar notice stating that the agency will exercise limited enforcement discretion on a temporary basis, by extending certain administrative permitting, testing, reporting and certification deadlines upon request. However, SCAQMD cautions that regulated entities “should make every effort to comply with all applicable air pollution control requirements, including, but not limited to, South Coast AQMD rules, permits, and hearing board orders.”
These agency notices suggest that environmental fieldwork in California should continue in most circumstances, at least where it is required for compliance with permits or enforcement orders issued by state agencies.
2. Construction and Construction-Related Activities
Many categories of work performed by environmental contractors may qualify as “essential” because the work supports essential construction activities. Most California stay-at-home orders define at least some types of construction activities as “essential.” For example, the statewide executive order deems “essential” construction workers “who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction).” Such activities may include the work of environmental contractors necessary to support and advance construction projects, such as investigation and removal of soil contamination discovered during soil excavation.
However, local jurisdictions differ widely as to what types of “construction” are permitted. The L.A. County “Safer at Home” order defines essential construction activities broadly to include “the operation, inspection, and maintenance of construction sites and construction projects for construction of commercial, office and institutional buildings, residential and housing construction.” Similarly, the “Safer at Home” order issued by Los Angeles City Mayor Eric Garcetti, on March 19 and revised April 10, provides that residents may leave their homes “to provide any services or goods or perform any work necessary to…build, operate, maintain or manufacture essential infrastructure,” including construction of “commercial, office and institutional buildings, [and] residential buildings and housing.”
By contrast, the Bay Area shelter-in-place orders define “construction” more narrowly, prohibiting most residential and commercial construction, with limited exceptions for (among other things) affordable housing, projects “immediately necessary” to the maintenance, operation, or repair of “essential infrastructure,” certain essential public works projects, construction necessary to secure an existing construction site required to be shut down under the order, and “construction or repair that is “necessary to ensure that residences and buildings containing Essential Businesses are safe, sanitary, or habitable to the extent such construction or repair cannot reasonably be delayed.”
Therefore, while certain monitoring and sampling activities by environmental contractors may be allowed in some jurisdictions as “essential” because these activities support construction or construction-related activities, businesses should consult the local orders applicable to the project site to determine which specific types of construction and construction-related activities are allowed.
3. Services Necessary to Maintain Safety, Sanitation and Operation of Essential Businesses and Essential Infrastructure
Governor Newsom’s executive order and many local stay-at-home orders include exemptions for a broad category of services aimed at maintaining the safety or sanitation of the state’s essential businesses and infrastructure. For example, the statewide order identifies as “essential” certain “[w]orkers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, construction, material sources, and essential operation of construction sites and construction projects (including those that support such projects to ensure the availability of needed facilities, transportation, energy and communications; and support to ensure the effective removal, storage, and disposal of solid waste and hazardous waste).”
The Bay Area and L.A. County orders include similar lists of exempt “service providers” who maintain the safety, sanitation, and essential operation of properties and other essential businesses. While environmental contractors are not included within any of the enumerated service job descriptions, they arguably fall within the broader category of “other service providers” who help maintain the safety and sanitation of construction projects and other essential businesses, particularly to ensure the removal, storage and disposal of solid waste and hazardous waste.
Several orders also include exceptions for activities related to “critical infrastructure.” The L.A. County order also allows residents to leave their homes to “perform any work necessary or provide any services to or obtain services from” certain “Essential Infrastructure” operations, broadly defined to include: “public works construction… water, sewer, gas, electrical, oil extraction and refining… solid waste collection, removal and processing [and] flood control and watershed protection…” Similarly, the Bay Area shelter-in-place orders define as “essential” businesses that operate, maintain, or repair “Essential Infrastructure,” including “oil refining” and “solid waste facilities (including collection, removal, disposal, and processing facilities).” Because environmental contractors provide services related to many of the types of essential infrastructure listed above, their work may arguably be exempt from many jurisdictions’ stay-at-home mandates.
Pillsbury’s experienced, multidisciplinary COVID-19 Task Force is closely monitoring the global threat of COVID-19 and providing real-time advice across industry sectors, drawing on the firm’s capabilities in crisis management, employment law, insurance recovery, real estate, supply chain management, cybersecurity, corporate and contracts law and other areas to provide critical guidance to clients in an urgent and quickly evolving situation. For more thought leadership on this rapidly developing topic, please visit our COVID-19 (Coronavirus) Resource Center.