Oklahoma v. Texas--Water Wars
Tarrant Regional Water District (“TRWD”) provides water to more than 1.7 million Texans in an 11-county area, and wants to buy water from Oklahoma. However, Oklahoma isn’t selling. Oklahoma has enacted statutes that impose restrictions on water sales across state lines which, as a practical matter, preclude the interstate sale of Oklahoma water to the TRWD. In 2007, TRWD sued to have those restrictions lifted, arguing that under the Commerce Clause of the US Constitution, state laws that discriminate against other states regarding water, an alleged article of commerce, are unconstitutional.
TRWD also argued that the Red River Compact (“Compact”) supersedes Oklahoma’s laws and would permit the sale of water to TRWD. This Compact was signed by Texas, Oklahoma, Louisiana and Arkansas in 1978 and approved by the U.S. Congress in 1980. The Compact essentially “divided” the water from the Red River and its tributaries between the states involved. In November, the U.S. District Court for the Western District of Oklahoma granted partial summary judgment rejecting TRWD’s claims based upon the Commerce Clause. The Court determined that, in fact, protection of Oklahoma water for use in Oklahoma was one of the purposes of the Compact, although the judge noted that this case presented a close question.
TRWD amended its complaint, and argued that the law in Oklahoma would not preclude the sale of groundwater to TRWD. Although the judge agreed, he determined that this claim was not yet ripe for consideration, as TRWD had not yet filed an application with Oklahoma to obtain groundwater. In addition, another new claim was added--- that the purchase of water from the Apache Tribe of Oklahoma was not covered by the Compact. This claim was dismissed as not providing the basis for a justiciable claim, since the arrangement with the Tribe had too many contingencies and uncertainties.
The judge entered judgment in the TRWD case on July 16, 2010, and TRWD filed its appeal with the Tenth Circuit on August 12, 2010. Stay tuned, the water wars between Oklahoma and Texas are far from over.
Annual Meeting Update - Saturday Optional Evening Outing
Get ready for an unforgettably spectacular waterborne tour of one of the busiest ports in the world aboard the Port of Houston Authority's free public tour boat!
Named for the legendary military commander who led the fight for Texas independence from Mexico and later statehood, the M/V Sam Houston offers free leisurely 90-minute round-trip cruises along the Houston Ship Channel.
Embarking from the port's Sam Houston Pavilion, visiting sightseers can enjoy passing views of international cargo vessels, and operations at the port's Turning Basin Terminal. Measuring 95 feet in length and 24 feet in width, the boat carries a maximum capacity of 90 passengers with air-conditioned lounge seating and additional standing room on the boat's rear deck.
The M/V Sam Houston has been operating as the Port Authority's public tour vessel since its inaugural voyage on July. 30, 1958. By 1979, a total of 1 million passengers had taken the tour.
Managing the Legal Risks of Green Buildings
As with “green washing” of products, which are subject to existing product liability law, there is an emerging area of law regarding liability for claims that a building marketed as “green” or alleged to achieve the desired platinum, gold, silver or standard Leadership in Energy and Environmental Design (LEED) certification has failed to do so.
As the LEED requirements and techniques for sustainable development become better understood and more widely adapted, more and more developers are seeking to build “green.” To the extent that the construction costs permit a manageable return on investment (ROI) and the specifications and requirements for such development are clearly spelled out in the various contractual documents, including especially the agreement with architects, we will likely see more and more claims that the resultant buildings are “green.”
Although some theories of liability will track areas in construction law, e.g., deficiencies in design, construction or installation, green buildings claims will face an additional layer of risk. Without such statutory coverage, cf strict product liability, today’s bases for liability may include breach of contract, tort, fraud and false advertising claims.
For example, in the Maryland case of Shaw Development v. Southern Builders, which was settled without an opinion, the loss of a tax credit based upon compliance with a LEED Silver certification level led to a claim of liability.
The best way to mitigate these risks is to ensure that all contractual documents are clear and consistent, project management is assured, information disclosures are accurate, and finally that insurance coverage, where available, is provided. With regard to documents, AIA form contract B214-2007 has been developed to provide some model contractual language; more than forty insurance carriers are now underwriting green building liability; and in many law firms, some of their attorneys and other technical people have become LEED accredited.
This is an area that will continue to develop as more and more green buildings are constructed. For more in-depth information on potential liability and tips to mitigate claims, see the Harvard Law School Environmental Law & Policy Clinic White Paper, “The Green Building Revolution: Addressing and Managing Legal Risks and Liabilities”.
Is United Haulers the Final Word on Local Flow Control?
The most recent Supreme Court examination of the validity of solid waste flow control ordinances under the dormant Commerce Clause occurred in United Haulers Ass’n v. Oneida-Herkimer Solid Waste Management Authority, 550 U.S. 330 (2007). In United Haulers, the Court held that flow control ordinances which favor a state-created solid waste authority, but treat in-state and out-of-state private entities the same, ‘do not “discriminate against interstate commerce” for purposes of the dormant Commerce Clause.’ Id. at 345. In such case, the validity of a nondiscriminatory ordinance with an incidental effect on interstate commerce is analyzed under balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Id. at 346. However, if the flow control ordinance favors a single private entity over other private entities, the holding in C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383 (1994), controls. Id. at 341.
United Haulers has been the linchpin for local governments to launch flow control ordinances. However, although the United Haulers decision upheld the validity of a flow control ordinance against a commerce clause challenge, the decision was based on an ordinance that was expressly authorized by the New York legislature and which required the disposal of solid waste at a landfill operated by a solid waste authority created by the New York legislature. In United Haulers, the New York legislature enacted specific legislation which allowed Oneida and Herkimer Counties to “impose ‘appropriate and reasonable limitations on competition’ by, for instance, adopting ‘local laws requiring that all solid waste . . . be delivered to a specified solid waste management-resource recovery facility.’” Id. at 335. Additionally, the flow control ordinance in United Haulers directed that all waste in Oneida and Herkimer Counties be disposed of at the Oneida-Herkimer Solid Waste Management Authority (“Oneida-Herkimer Authority”), which was created by the New York legislature and was therefore a political subdivision of the state. Id. at 335. As such, under United Haulers, it is clear that a local flow control ordinance authorized by state legislation and directing solid waste to a public waste authority created by state legislation does not violate the commerce clause if it satisfies the Pike balancing test. It is likewise clear that a flow control ordinance which directs all solid waste generated within the boundaries of a local government to be directed to a privately-owned facility is still controlled by the holding in C & A Carbone, Inc. v. Clarkstown and invalid. 511 U.S. at 391. However, the United Haulers decision does not specifically address the significance of the authorization for the flow control ordinance by the New York legislature.
According to a 1995 EPA report to Congress, state legislatures in 35 states have expressly authorized the enactment of flow control ordinances by local governments. For those states in which flow control is not expressly authorized by the state legislature, it is unclear whether a flow control ordinance enacted by a subdivision of the state would withstand a commerce clause challenge. At the very least, the absence of state authorization for flow control measures may affect the analysis of certain elements under the Pike balancing test. Additionally, in states in which the state legislature has not expressly authorized the enactment of flow control ordinances by local governments, a local flow control ordinance could be preempted by state solid waste laws and therefore invalid even if it does not violate the commerce clause; thus, leaving open the question of whether or not United Haulers has opened the door forever on local flow control.
At least one frontal challenge to local flow control is pending in S.C. In Sandlands, LLC, et al. vs. Horry County, et al., Case No. 4:09-cv-01363-TLW-TER (currently pending in United States District Court in the District of South Carolina), a landfill and affiliated hauling company are challenging a county’s ability to restrict the exportation of waste to out-of-county landfills on commerce clause and preemption claims. The plaintiffs are attempting to distinguish United Haulers as well as arguing that the ordinance is preempted by State law. The impacts of the ordinance are being felt on disposal facilities in the region as the State has implemented a regional planning approach for siting disposal facilities. While the defendants removed the commerce clause question to federal court, the federal court has certified and the State Supreme Court has accepted the preemption question.
EPA'S CLIMATE EFFORTS TAKE CENTER STAGE
With Congress failing to act on climate change, attention turns to EPA’s efforts to regulate greenhouse gases (GHGs) pursuant to its authority under the Clean Air Act (CAA). On December 7, 2009, the EPA issued its Endangerment Finding for GHGs, concluding under the CAA’s mobile source section that GHGs endanger public health and welfare, and that GHG emissions from motor vehicles contribute to climate change. See 74 Fed. Reg. 66,496 (Dec. 15, 2009). The determination was a direct response to the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), holding that because GHGs are considered “air pollutants” under § 202(a) of the CAA, EPA has authority to regulate them if it determines that they endanger public health or welfare.
Although the Endangerment Finding does not itself impose any requirements on regulated entities, it sets in motion a chain of events culminating in the regulation of GHGs emissions from stationary sources under the CAA. First, it is the predicate for EPA’s rule, signed jointly with the Department of Transportation (DOT) on April 1, 2010, to create GHG emission standards and Corporate Average Fuel Economy (CAFE) standards for light duty vehicles (e.g., cars, light-trucks). See 74 Fed. Reg. 49,454 (proposed on Sept. 15, 2009); 75 Fed. Reg. 25324 (finalized on May 7, 2010). This will dramatically improve fuel economy, requiring automobile companies to meet a combined average fleet of 250 grams of CO2 per mile, or 35.5 miles per gallon by 2016. Additionally, on May 21, 2010, President Obama directed the EPA and DOT to create GHG and CAFE standards for medium- and heavy-duty trucks for Model Years 2014-2018, which currently average only 6.1 miles per gallon. He also directed the agencies to extend the national program for cars and light-duty trucks to Model Years 2017-2025.
Hydraulic Fracturing - To Disclose or Not To Disclose
The ongoing developments in the Gulf of Mexico, together with last years coal ash and mine safety incidents have contributed to a renewed interest for regulation in Congress. One of the areas under consideration for such further regulation is hydraulic fracturing, a well drilling technique used to develop oil and gas resources.
The technology used in fracturing has been in use for decades in the oil industry. Thousands of wells across the country use the technology. The renewed interest in regulating coincides with the expansion of fracturing into more recently confirmed deposits of natural gas, located in shale deposits thousands of feet beneath the earth’s surface. A hydraulic fracturing well, in those contexts, is first drilled vertically down, and then advanced horizontally into the shale. Then, highly pressurized water, plus very low concentrations of chemicals, added to enhance the effectiveness of the technique and to protect the related equipment, is introduced into the well. The resulting pressure cracks the shale, permitting the well to collect natural gas.
Congress exempted the fracturing process from regulation under the Safe Drinking Water Act (SDWA) in 2005. Since then, fracturing has been regulated by the states where the wells are located. However, the changed regulatory climate, coupled with the fact that shale deposits have been identified in locations like New York and Pennsylvania, which are not traditional “energy states,” has led to questions about whether that exemption should end or be modified. Most recently, efforts have focused on narrowing, not abandoning the exemption. All of this has occurred despite a positive regulatory and enforcement history for the fracturing industry.
There have been two principal avenues for the Congressional proposals related to fracturing. Both would require well developers to identify the chemicals added to the water, and provide them to an oversight body, which would publish the information on the internet. One route would amend the SDWA to allow states to compel disclosure, and would require a federal disclosure mechanism as a default, if a state failed to set one up. The other route, which has been less talked about recently, would accomplish a similar result within the framework of the Emergency Planning and Community Right to Know Act.
Industry is not of one mind on whether and how to advance the disclosure concept. Many important natural gas developers are prepared to work with a tailored federal disclosure requirement, provided the oversight entity is one other than EPA. Other, traditional elements within the industry, oppose any change to the federal exemption. And, both prongs agree that the issue has been well and adequately regulated by states for years, and should remain principally the province of the states.
In the current Washington environment, regulation seems more likely than ever, but it is far from inevitable. Despite aggressive opposition campaigns, an advocacy film and public forums crowded with well-organized fracturing opponents, those clamoring for federal change have yet to substantiate even the most often repeated anecdotes of environmental risk.
In response to a request from Congress, EPA has launched a study to evaluate the possible influences of fracturing activities on ground water sources used for drinking. Similar, but more limited exercises also are taking place at the state level. The best result, of course, would be to maintain the current level of regulatory oversight until these studies are complete, and then to evaluate the need for change based on those scientific results. Unfortunately, that is not necessarily how our environmental laws have progressed in the past. Perhaps it will be how Congress proceeds this time. Hope springs eternal.
Climate Legislation Is Dead (For Now): Long Live Conventional Pollutants
Climate change legislation is dead for now. I won’t pretend it’s not depressing, even though I avoid the political channels and ignore the rhetoric. For those of us who haven’t refudiated climate change science, it’s a victory for the pessimists and evidence that Congress has a hard time addressing long-range problems, even if consequential.
With respect to regulation of GHG, it’s the worst of both worlds and no one should be happy (which is why I held out hope until the end that cooler heads would prevail). We’re still going to have regulation of GHG, the mechanism being EPA’s recently promulgated Tailoring Rule for GHG. One word. Ugh. Does this really make climate skeptics happy? Do they really think that they will somehow succeed in rolling back the Tailoring Rule? I don’t think so. On the other hand, we don’t have an economy-wide cap-and-trade or carbon tax regime. Are environmentalists happy? I still don’t think so.
I’m left feeling a little like Rodney King. 
Certainly, the issue isn’t going to go away before the next Congress is sworn in.
As I have noted before, however, problems with climate change legislation don’t mean that Congress can’t enact legislation further regulating traditional pollutants. The three-pollutant bill now before the Senate already has a Republic co-sponsor, Lamar Alexander. Now, according to a report in E&E Daily, even Senator Inhofe is stating that he’s interested in working with Democrats to move three-pollutant legislation. Given the failure to move GHG legislation, .jpg)
hell is likely to get hotter before freezing over, but if Inhofe can really be brought on board, there’s no reason why legislation couldn’t pass.
Three-pollutant legislation shares one significant feature with the GHG issue. Like GHG regulation, efficient regulation is hampered by limitations in existing law, as we saw with the D.C. Circuit’s rejection of the trading regime in the CAIR regulations, and EPA’s much more limited trading program in the Transport Rule. Senator Voinovich, another Republican that three-pollutant legislation supporters would like to have with them, noted as much, saying that the transport rule would be a "stringent and inflexible regime." New legislation could provide for a more robust trading regime. We’ll see if that’s enough to bring Republicans on board.
I sure hope so. Right now, all we’ve got is a GHG regulatory program that won’t do much for climate change, but will cause my clients endless headaches, and a Transport Rule that’s probably the best EPA can do on traditional interstate pollution, but not nearly as cost-effective as it might be with new legislative authority. I remain an optimist, but sometimes it’s difficult.
China Points To Population Control As Climate Change Strategy
The population issue has not received much comment when countries discuss ways to mitigate climate change and slow down global warming, according to Zhao Baige, Vice Minister of National Population and Family Planning Commission of China (NPFPC).
“Dealing with climate change is not simply an issue of CO2 emission reduction but a comprehensive challenge involving political, economic, social, cultural and ecological issues, and the population concern fits right into the picture,” said Zhao.
Zhao cites studies that link population growth with emissions and the effect of climate change, saying:
“Calculations of the contribution of population growth to emissions growth globally produce a consistent finding that most of past population growth has been responsible for between 40 percent and 60 percent of emissions growth,” citing the 2009 State of World Population report, released earlier by the UN Population Fund.
Although China’s family planning policy has received criticism over the past three decades, Zhao said that China’s population program has made a great historic contribution to the well-being of China’s society.
As a result of the family planning policy, China has seen 400 million fewer births, which has resulted in 18 million fewer tons of CO2 emissions a year, Zhao said. The UN report projected that if the global population would remain 8 billion by the year 2050 instead of a little more than 9 billion according to medium-growth scenario, “it might result in 1 billion to 2 billion fewer tons of carbon emissions.”
Meanwhile, she said studies have also shown that family planning programs are more efficient in helping cut emissions, citing research by Thomas Wire of London School of Economics that states: “Each $7 spent on basic family planning would reduce CO2 emissions by more than one ton” whereas it would cost $13 for reduced deforestation, $24 to use wind technology, $51 for solar power, $93 for introducing hybrid cars and $131 for electric vehicles."
Zhao admitted that China’s population program is not without consequences, as the country is entering the aging society fast and facing the problem of gender imbalance.
Whether, and, if so, how, population control should be an active part of a country’s climate control is certainly a difficult political and cultural issue – but one that fast-growing economies such as China, India, and Brazil may have to face in the coming years.
The Deck is Still Stacked in the Government's Favor -- Is This A Good Thing?
Last week, in City of Pittsfield v. EPA, the First Circuit Court of Appeals affirmed denial of a petition by the City of Pittsfield seeking review of an NPDES permit issued by EPA. The case makes no new law and, by itself, is not particularly remarkable. Cases on NPDES permit appeals have held for some time that a permittee appealing an NPDES permit must set forth in detail in its petition basically every conceivable claim or argument that they might want to assert. Pretty much no detail is too small. The City of Pittsfield failed to do this, instead relying on their prior comments on the draft permit. Not good enough, said the Court.
For some reason, reading the decision brought to mind another recent appellate decision, General Electric v. Jackson, in which the D.C. Circuit laid to rest arguments that EPA’s unilateral order authority under § 106 of CERCLA is unconstitutional. As I noted in commenting on that decision, it too was unremarkable by itself and fully consistent with prior case law on the subject.
What do these two cases have in common? To me, they are evidence that, while the government can over-reach and does lose some cases, the deck remains stacked overwhelmingly in the government’s favor. The power of the government as regulator is awesome to behold. Looking at the GE case first, does anyone really deny that EPA’s § 106 order authority is extremely coercive? Looking at the Pittsfield case, doesn’t it seem odd that a party appealing a permit has to identify with particularity every single nit that they might want to pick with the permit? Even after the Supreme Court’s recent decisions tightening pleading standards, the pleading burden on a permit appellant remains much more substantial than on any other type of litigant.
Why should this be so? Why is it that the government doesn’t lose when it’s wrong, but only when it’s crazy wrong?
Just askin’.
Alabama Court Dismisses CERCLA Section 107 Claims for Compelled Cleanup Costs
On July 2, 2010, the U.S. District Court for the Northern District of Alabama published a must read opinion regarding cost recovery claims under CERCLA. See Solutia, Inc., et al. v. McWane, Inc., et al., Case No. 03-1345, Document No. 622 (N.D. Ala. July 2, 2010).The case was originally filed by plaintiffs in 2003 as a CERCLA cost recovery and contribution action against several industrial defendants located in Anniston, Alabama related to plaintiffs' cleanup of historic PCB contamination throughout the Anniston area. In June 2008, the Court had previously granted defendants' motion for summary judgment regarding plaintiffs' CERCLA Section 113 claims for contribution but had allowed plaintiffs to proceed with their CERCLA Section 107 cost recovery claims. However upon motion for reconsideration, the Court on July 2 issued a detailed opinion also dismissing with prejudice plaintiffs’ cost recovery claims under Section 107.
Of interest to CERCLA practitioners, the dismissal opinion provides a lengthy analysis, based on recent Circuit Court decisions, as to whether a plaintiff who seeks to recover costs of a cleanup performed pursuant to obligations under a consent decree or administrative settlement (aka “compelled” cleanup costs) can bring a claim under Section 107(a)(4)(B). Notably, the U.S. Supreme Court did not decide the appropriate route for recovering “compelled” costs (under Section 107(a), 113(f), or both) in its most recent opinion addressing CERCLA Sections 107 and 113. United States v. Atlantic Research Corp., 551 U.S. 128 (2007). Nevertheless, the Northern District of Alabama agreed to reconsider defendants' motion to dismiss plaintiffs' Section 107 claims in light of Circuit Court decisions issued subsequent to Atlantic Research as well as new evidence. Indeed, the Court agreed with the defendants' assessment that the majority of Circuit Court decisions decided after the Northern District’s previous denial of defendants’ motions for summary judgment have held that a party who incurred “compelled” cleanup has a viable Section 113 claim for contribution and not a Section 107 claim for cost recovery.
Ultimately the Court concluded that the recent Circuit Court decisions were correct in their assessment that Congress had intended for Section 113(f) to be the exclusive remedy to recover costs incurred pursuant to a judgment, consent decree, or settlement. Because the Court agreed withdefendants' argument that plaintiffs’ costs related to its PCB cleanup were incurred by virtue of a prior consent decree, the plaintiffs only had a potential right to a Section 113 claim for contribution (which was previously dismissed) – not a Section 107 claim for recovery.
Again, the opinion is a helpful summary of evolving jurisprudence under CERCLA regarding Section 107 and Section 113 claims.
