VW Settlement Specifically Targets Overburdened Communities

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By Rachel Leven

Oct. 20 — Low income and minority communities stand to directly benefit under the proposed $14.7 billion Volkswagen settlement that was negotiated with them specifically in mind, a unique approach from previous mobile source settlements.

While it isn’t new for settlements addressing air pollution from cars and other mobile sources to result in benefits for these communities, outreach preceding the settlement agreement and certain language tucked into it appeared to give “a nod” to overburdened communities more directly than previous settlements, attorneys and others said.

But the Justice Department’s top environmental attorney emphasized to Bloomberg BNA that there is more that is new to this settlement than this environmental justice mention. It’s the entire approach, he said.

“It is unique,” John Cruden, the Justice Department’s assistant attorney general for the Environment and Natural Resource Division, said of language included in the consent decree that refers to communities bearing a disproportionate burden of certain pollution. “But so was the pollution.”

Under the consent decree, $2.7 billion would be allocated through a trustee for projects to reduce nitrogen oxides emissions such as replacing old trucks with less polluting newer models at places like ports. These projects are intended to mitigate the nitrogen oxides emissions pollution allegedly caused by Volkswagen’s nearly 500,000 2.0 liter diesel vehicles equipped with defeat devices that allowed them to pass federal tests despite emitting far more pollution than allowed under actual driving conditions.

But within each of those projects, applicants must consider “the potential beneficial impact” of their actions “on air quality in areas that bear a disproportionate share of the air pollution burden within their jurisdiction.” This means targeting pollution reduction for the most burdened in a given non-attainment community—not just any community that has some air pollution. While the proposed consent decree’s language doesn’t specifically mention low-income or minority communities, Cruden said it “is consistent with those themes” that certain areas can bear a disproportionate pollution burden and may not have a strong voice on these issues.

“We wanted to build in to the decree the ability to take that into account,” Cruden said. “So it’s not exactly, but it is consistent with, the themes of environmental justice, what we were attempting to do there.”

U.S. District Court for the Northern District of California Judge Charles Breyer in San Francisco said during an Oct. 18 hearing that he is “strongly” inclined to approve the settlement, and a decision is expected by Oct. 25 ( In Re Volkswagen “Clean Diesel” Marketing, Sales Practices and Products, N.D. Cal., No. 3:15-md-2672, 10/18/16 ).

Justice Outreach Expanded.

Not only has the federal government secured potentially billions of dollars for overburdened communities as part of the settlement, the Environmental Protection Agency has expanded its efforts to make sure those communities know those funds are available.

A month after the Volkswagen deal was announced, the agency held a teleconference for community advocates and highlighted exactly why the consent decree matters to these populations.

“Mitigation work that will be done under the settlement is of special importance to communities affected by diesel emissions because states and tribes have the option to participate by receiving funding for certain clean air projects,” the EPA said in a notice to environmental justice advocates.

As recently as September, Matt Tejada, the director of the EPA’s Office of Environmental Justice, touted the “billions of dollars” that could be targeted at reducing particulate matter in overburdened communities—a significant public health concern in areas such as those around ports during a Bloomberg Government event.

While the EPA regularly has calls with environmental justice communities on significant regulations and grant opportunities, Vernice Miller-Travis, an environmental justice advocate and senior associate at Skeo Solutions, said this kind of outreach on an enforcement action is unique.

“I think that’s really stretching outside the box for EPA,” Miller-Travis told Bloomberg BNA, adding that the additional outreach may have been sparked by previous criticism that the EPA was leaving out the people most impacted during settlement discussions. “I think this is a major step forward by the EPA.”

Is This Unique?

Former EPA and Justice Department staff and stakeholders told Bloomberg BNA that it is likely that low-income and minority communities benefited from past mobile source settlements. However, this settlement actively considers pollution in overburdened communities.

Environmental mitigation included in past mobile source settlements likely resulted in “natural benefits to environmental justice communities,” Bruce Buckheit, a consultant who previously served as director of the EPA’s Air Enforcement Division, told Bloomberg BNA. For example, projects such as reducing emissions on highways would help the people within 400 to 800 yards of the roads, he said.

It can be harder to identify affected environmental justice communities to incorporate into mobile source settlements—communities impacted by offending vehicles—than to identify communities near violating power plants, for example, Adam Kushner, a partner at Hogan Lovells US LLP who formerly served as director of the EPA’s Office of Civil Enforcement and senior counsel at the Justice Department’s environment division, told Bloomberg BNA.

The widespread pollution and the scope of the settlement make the Volkswagen prime for this sort of approach, Cruden said.

“It wouldn’t be hard to see that some low-income community somewhere could demonstrate that we really had a lot [of this pollution] for some particular reason,” Cruden said. “We wanted to make sure that when we did this, we had looked at every possible setting, and as this plays out, as it’s implemented, that gives us a chance to consider those things, which otherwise you wouldn’t be able to.”

But in the Volkswagen settlement, Cruden said the language is “unique” because it makes consideration of reducing disproportionate pollution in overburdened communities a factor in determining how to spend settlement funds.

Bill Becker, executive director for the National Association of Clean Air Agencies, called that “huge” for these communities.

“They didn’t say ‘spend this money in ameliorating the nonattainment area in your community’ … They really honed in on areas with disproportionate burdens,” Becker said. “I think it’s very unique that they have singled out as clearly as they did that money be spent helping these environmental justice areas.”

The VW ‘Approach.’

But there is more that is unique about the Volkswagen settlement than this one clause acknowledging environmental justice considerations, Cruden said. The federal government took an entirely different approach to address the impacts of the pollution “holistically” and all at once, he said.

In a normal case, the government would find the violation, seek a penalty and injunctive relief, Cruden said. But in Volkswagen, the government addressed first the large number of 2.0 liter engine cars that were still being driven but hasn’t yet sought the penalty or the injunctive relief, he said.

The government made an estimate of nationwide pollution stemming from the cars, and divided it among states, Cruden said. The approach is “way different than proving a penalty and proving a precise amount of nitrogen oxides emissions, and then proving the precise impact that could have on individuals,” he said.

This approach gave the federal government the opportunity to holistically address what it saw as the impacts of the pollution “and try to look completely across the horizon and try to make sure that everybody had a voice in that process.”

“We actually are very proud of that result,” Cruden said. “But we have more to go. We absolutely have more to go.”

To contact the reporter on this story: Rachel Leven in Washington, D.C., at rleven@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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