UTAH, CHILE, PM2.5 AND THE RULEMAKING PROCESS

Posted on September 29, 2015 by James Holtkamp

My wife and I are 6 months into an 18-month adventure in South America.  Although we are roaming around a bit, most of our time is spent in Santiago, Chile, a city of 5 million nestled in a valley between the Andes to the east and coastal mountains to the west.  Santiago is a modern city, with a highly educated population.  It has lots of cars and lots of wood-burning fireplaces and stoves and the typical assortment of manufacturing and power generation facilities for a city of its size.  In the winter, high pressure settles in over the valley and the fine particulate pollution builds up, creating serious public health emergencies in which driving is restricted, industrial activities are curtailed, and people are urged not to engage in strenuous activities outside.  

In a sense I feel right at home, because along Utah´s Wasatch Front, winter inversions trap emissions from cars and wood burning to create grungy, unhealthy spikes in PM2.5 for days or even weeks at a time much like Santiago.  In Utah the issue is addressed through the Clean Air Act, with Salt Lake City and the associated metropolitan areas designated as non-attainment areas for the short-term national ambient air quality standards for fine particulate matter and a comprehensive State Implementation Plan (SIP) developed by the Utah Department of Environmental Quality with thorough stakeholder involvement.  

At the beginning of the SIP process, most of the public blamed the relatively few but highly visible industrial facilities (the refineries, the big Kennecott operations, etc.) as the principal culprits.  However, as the stakeholder process evolved, public awareness shifted dramatically, with most Utahns now acknowledging that vehicle use and the aggregate effect of individual small sources are major contributors to the problem, and that individual personal choices with regard to vehicle use and lifestyle habits will be key to improving the wintertime air quality.

In Chile, the legal requirements to address winter inversion pollution are just as sophisticated and detailed as those under the U.S. Clean Air Act.  The government has identified pretty much the same causes of the pollution as in Utah, i.e., cars, wood-burning, a variety of small businesses, and some but not many larger manufacturing sources.  Also, Chilean law specifies a rulemaking process analogous to that in the U.S., with scientific studies, technical and economic analyses, and stakeholder consultation before finalizing an environmental rule.  As a result, as in Utah, there is more public awareness in Chile of the role that individual choices play in environmental degradation which in turn leads to more of a shared sense of responsibility for dealing with it.

However, in my conversations with South American environmental lawyers outside of Chile about the legal systems for addressing environmental issues, I have found that they are not so much concerned about the substantive requirements on the books – those are not much different than those in the U.S. – but rather, are concerned that there are not always well-developed mechanisms for participation by the affected stakeholders in the development of environmental requirements. 

ACOEL is reaching out to entities around the world to make available the considerable expertise of its members to address environmental challenges.  In Latin America, ACOEL can play an important role in helping develop robust participatory processes which will yield great benefits in the development and enforcement of environmental requirements and the broader strengthening of participatory democratic institutions in this part of the world.

SCORE A VICTORY FOR REGIONAL STORM WATER MANAGEMENT

Posted on September 24, 2015 by Michael Hardy

Ohio statutes authorize regional sewer districts to collect and treat sewage, including combined sewer overflows, and to charge fees for those services.  The regional sewer district in the Cleveland area (“NEORSD”), with a service territory encompassing nearly 60 communities of Cuyahoga County and some nearby counties, took its authority one step further.  Nearly fifty years after its creation, the NEORSD added a regional storm water management program that would charge property owners fees on the basis of a formula primarily tied to the square footage of impervious surfaces like parking lots and roofs.  The NEORSD envisioned the plan would address the considerable urban sprawl that had occurred since the 1970’s and that had created vast expanses of impervious spaces in the form of parking lots, large clusters of office, shopping, Big Box, commercial and industrial facilities, often in the upland suburban areas to the east and south of the core city (many suburbs’ names end with “Heights”).  With the conversion of green space to impervious surfaces, many of the lower lying areas began to experience more flooding and erosion. 

Not content to wait for the individual upland communities to control storm water in a decentralized fashion, the NEORSD in 2010 adopted its plan in response to the “regional” flooding that urban sprawl created and exacerbated.  But there was immediate and well financed opposition to the expanded storm water program.  Opposition came from several communities which maintained their own capital intensive storm water systems and from commercial property owners which feared the hefty fees they would pay as a result of the parking lots and roof structures they had constructed.   And the opposition succeeded when, in 2013, the Cuyahoga County Court of Appeals ruled that the statutory charter could not support regional storm water control.  See my February 5, 2014 posting, “Storm Water Management by a Regional Sewer District: Was it a Power Grab or a Logical Extension of Existing Powers?”  

With that decision, the NEORSD stopped collecting the estimated $35,000,000 per year in fees to implement the regional storm water prevention and abatement measures, but it did not give up.  The NEORSD appealed to the Ohio Supreme Court, and received considerable amicus support.  [Full disclosure: I authored a supporting amicus brief.]  

More than a year after oral argument, the Ohio Supreme Court announced its decision.  In a 5-2 vote, the high court reversed, finding that the NEORSD possessed the statutory authority to undertake regional storm water control.  But as to the collection of fees, the vote was closer, with four Justices approving of the NEORSD fee plan and three dissenting.  One Justice dissented because she believed that the fees are intended to relate to services and are not for the future construction and eventual operation of the infrastructure; therefore, she concluded that the NEORSD is premature in assessing fees until it actually provides a “benefit” or “service” from “water resource projects” already in operation.  The other two dissenting Justices found that the regional storm water plan exceeds the NEORSD authority and that the fees are unrelated to services, and therefore, the fees are invalid, un-voted “taxes”. Northeast Ohio Regional Sewer District. v. Bath Twp., Slip Opinion No. 2015-Ohio-3705(decided September 15, 2015.

With the passage of time since the NEORSD plan’s conception in 2010, and the eventual judicial affirmation approximately five years later, a great deal of momentum was lost, with delays in the acquisition of infrastructure to abate storm water runoff and deferral in the collection of funds to implement the program.  Nevertheless, the Supreme Court’s validation of the NEORSD regional storm water plan should “greenlight” similar strategies of other regional sewer districts that are grappling with urban-sprawl induced storm water issues.

LOOK AT WHAT JOHN ROCKEFELLER STARTED

Posted on September 15, 2015 by Michael Hardy

Few recognize Ohio’s pivotal role in the development of the oil and gas industry in the United States.  John D. Rockefeller amassed fortunes in Cleveland with his oil refining business (until Uncle Sam broke up the monopoly).  Since then, there have been a number of different oil and gas booms in the state, for example in the mid-1960’s north of Columbus, then again in deeper sandstone formations in suburban areas of Cleveland approximately 10 years ago, and now, the whopping Utica shale play primarily in eight counties in eastern Ohio at depths over 8000 feet below ground surface and horizontal laterals extending a mile or more.  The Ohio Department of Natural Resources (“ODNR”) has issued over  2000 Utica drilling permits, and there are approximately 1000 wells in production or drilling (costing millions to complete).  Hydraulic fracturing (“fracking” its critics pejoratively call it) has been around a long time, but only recently has it been the focus of media and regulatory scrutiny.  All of these historical booms going back to the mid-1960’s have forced the Ohio General Assembly to enact and update  comprehensive statutes that regulate drilling activities.  

Those in the industry were successful in having the General Assembly confer “sole and exclusive authority” to the ODNR “to regulate the permitting, location, and spacing of oil and gas wells and production operations.”  But what about the longstanding, traditional “home rule powers” that the Ohio Constitution conferred on municipalities to take care of health, safety and land-use matters within their jurisdictions?  The juxtaposition of the two came to a head in a case that ironically does not deal with the massive Utica shale wells, but more modest gas wells in a shallower formation in a suburb in Northern Ohio. 

The ODNR had issued a drilling permit to Beck Energy to drill a well in Munroe Falls in 2011.  But Munroe Falls obtained a local trial court injunction prohibiting the permitted drilling until Beck Energy complied with all local ordinances, including the payment of a fee, the posting of a bond, and the holding of a public meeting.    Despite having the state’s authorization to proceed, Munroe Falls prohibited the drilling until it issued its zoning certificate, which it would not do (if at all) for at least one year after Beck met the other pre-conditions.  

The dispute found its way to the Ohio Supreme Court, which issued a “plurality” opinion (4-3) in favor of Beck Energy (and the ODNR).  State ex rel. Morrison v. Beck Energy Corp. The City argued that the state statute regulates the technical aspects of oil and gas drilling while the municipal ordinances address traditional local zoning concerns.  The majority seemed troubled by the scope of the “sole and exclusive” language, but seemed content to defer this policy question to the General Assembly.   Because the traditional  Home Rule powers have enjoyed longstanding and wide ranging judicial respect, the majority in the Beck Energy  case limited the decision to the Munroe Falls ordinances before the Court, presumably leaving open some future role for local zoning ordinances.   

The initial reaction of the bar was to focus on the separate concurring opinion of Justice O’Donnell, who was reluctant to displace local zoning authority in favor of sweeping state regulatory authority.  In his view, the “sole and exclusive” authority was intended to preempt a patchwork of local laws related to the technical and safety aspects of drilling and not to divest local governments of their traditional authority to promulgate zoning regulations that ensure land-use compatibility, preserve property values, and foster long-term community development plans.  The dissenting Justices, along with Justice O’Donnell, noted the troubling omission of the word “zoning” when the General Assembly spoke to “exclusivity.”  That is to say, if the General Assembly really meant to displace local zoning practices, it could have clearly said so, as it has done with other licensing statutes. 

The Ohio Supreme Court’s decision has not put an end to the hotly contested question of the scope of pre-emption.  For example, an activist group in suburban Broadview Heights has filed a putative class action lawsuit claiming that the City’s Community Bill of Rights supersedes state laws.  And recently, the Ohio Secretary of State refused to certify county-wide ballot initiatives that sought to prohibit fracking and/ or drilling in their respective jurisdictions. 

So after I finish this blog tonight, I will drive down Rockefeller Drive, pass the remains of the old Standard Oil refinery, and wonder what John D would have thought of this tension between state preemption and local health and safety regulations. 

Chicken Little Cannot Compare to the Opponents of the Clean Power Plan

Posted on September 10, 2015 by Seth Jaffe

On Wednesday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register.  The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”

Really?  Tell me something I did not know.

I’m sorry.  The CPP is a far-ranging rule.  There are strong legal arguments against its validity.  Those arguments may prevail.  I see it as about a 50/50 bet.  This I do know, however.  The sky isn’t falling. The sky won’t fall, even for West Virginia, if the rule is affirmed and implemented. Those opposed to regulation have made these arguments from time immemorial – certainly no later than when Caesar tried to regulate the amount of lead in Roman goblets.  And if I’ve got that one wrong, at least no later than Ethyl Corporation v. EPA, when opponents of EPA’s rulemaking on leaded gasoline thought that the rule would mean the end of western civilization.

I’m not naïve.  I understand that these arguments are political as well as legal.  I just think that opponents of EPA rulemaking undermine their own political position in the long run by repeatedly predicting catastrophe, even though catastrophe never arrives.

sky is falling

THE TIMES THEY ARE A CHANGING FOR CALIFORNIA’S PROPOSITION 65

Posted on September 9, 2015 by Robert Falk

California’s “Proposition 65” warning requirements have long been a major concern for businesses that want their products offered for sale in the State’s large marketplace.  Businesses whose products contain even a detectable amount of any one of more than 900 chemicals often face enforcement lawsuits brought by for-profit plaintiffs unless their products contain a “clear and reasonable” Proposition 65 warning.  Short of eliminating the chemical entirely, the only way for businesses to immunize themselves from such claims has been for companies to label or display their products with a generic warning based on language set forth in the original Proposition 65 regulations.  It usually states: “WARNING:  This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.” 

Three new developments threaten to make Proposition 65 less predictable and more difficult. 

1)      New Proposition 65 Warning Regulations Proposed for Adoption:  Earlier this year, the California Office of Environmental Health Hazard Assessment (“OEHHA”) formally proposed an extensive set of new rules concerning the requirements for Proposition 65 warnings to be deemed “clear and reasonable.”  While Proposition 65’s current regulations allow for compliance with its warning requirements through the type of generic, one sentence statement appearing above, the proposed regulations will, among other things, require:

a.       use of a yellow triangle pictogram containing an exclamation point;

b.      a more unequivocal warning statement indicating that the product “can expose” a user to chemicals known to the State to cause cancer and birth defects or other reproductive harm;

c.       listing particular chemicals if they are among a group of twelve which are the most frequent targets of Proposition 65 litigation;

d.      adding a URL to all warnings linking a public website that OEHHA will operate to provide information supplementing the warning for those so interested (see below); and

e.       presentation of the warning in languages in addition to English if the product label otherwise uses languages other than English.

The proposed new Proposition 65 warning regulations specify alternative and additional requirements for certain types of products, including for food, restaurants, and several products or facilities that have previously been the subject of enforcement litigation.  They also adopt revised and more onerous requirements for warnings for “environmental exposures,” such as for air emissions that arise from the operation of facilities or equipment within the State.  As proposed, businesses will have two years from the adoption of a final rule to transition their warnings to meet the requirements of the new regulation, after which they can face enforcement actions and citizen’s suits for products in the California market that still bear the old (or no) warnings.

2)      New Proposition 65 Website-Related Requirements Proposed for Adoption:  Although not contemplated by the voters when they approved Proposition 65 over twenty-five years ago, OEHHA is also proposing that it operate a website to provide information to the public to supplement and explain the basis for the Proposition 65 warnings given by businesses.  Information to be provided on this website may include the routes or pathways by which exposure to a chemical from a product may occur, OEHHA’s quantification of the level of exposure to a chemical presented by a product, and other information that may be of interest to plaintiffs as well as to sensitive consumers and other members of the public. 

Significantly, in addition to its potential public education function, the proposed website regulations also empower OEHHA to require that manufacturers, importers, and distributors of products bearing a Proposition 65 warning provide the agency with information if so requested.  Such information may include the identities of the chemicals in the product for which a warning is being given, the location or components of a product in which such chemicals are present, the concentration of those chemicals, and “any other information the lead agency deems necessary.”  While trade secret protection may be asserted in some circumstances, the requirement to provide information to OEHHA will be enforceable by public prosecutors, including the California Attorney General and District Attorneys.  

3)      Potential Changes Relative to Proposition 65’s “Safe Harbor” Levels for Chemicals Listed for Reproductive Effects:   Lead has been the focus of the vast majority of all Proposition 65 enforcement actions to date and resulted in hundreds, if not thousands, of settlements with national and international implications over the past two decades.  Cases have included those concerning trace levels of lead in ceramic tableware, water faucets, candy, mini-blinds, toys, and a wide array of other consumer products and foods.  However, in 2013, a trial concerning lead in 100% fruit juices, packaged fruits, and baby foods resulted in a highly significant Proposition 65 defense verdict based on a judge’s finding that the trace levels of lead exposure presented by each of these products was less that the State’s published “safe harbor” warning threshold for lead of 0.5 “micrograms/day.”  A California Court of Appeal decision published earlier this year sustained, among other things, the trial court’s finding that it was permissible for defendants’ experts to construct a daily average level of exposure based on real world data concerning the frequency of the consumption of the products at issue over a fourteen day time period.   Environmental Law Foundation v. Beech-Nut Corporation, et al., 325 Cal.App.4th 307 (2015). 

In anticipation of this type of appellate decision, earlier this year, one of the most historically active Proposition 65 plaintiff’s groups, the Mateel Environmental Justice Foundation, filed a lawsuit seeking a writ of mandate and declaratory relief challenging the 0.5 microgram/day “safe harbor” for lead.  Mateel contends that California’s published threshold for lead was not set consistently with Proposition 65’s 1,000-fold safety factor requirement for reproductive toxicants.  It therefore argues that this longstanding Proposition 65 safe harbor threshold should be declared illegal and inoperative despite it having been published more than 25 years ago and relied on for thousands of settlements and warning decisions.  Mateel further argues in its case that OEHHA should be ordered to promptly establish a dramatically more stringent safe harbor level for lead based on updated science concerning trace level exposures to lead.  It also seeks to have OEHHA ordered to adopt a rule precluding the averaging of exposure across multiple days in relation to the lead safe harbor level.  A second prominent citizen’s group, the Center for Environmental Health, which also focuses on Proposition 65 enforcement, submitted an administrative petition to OEHHA in early July seeking relief parallel to that sought by Mateel, regardless of the outcome of the lawsuit. 

OEHHA has just announced that, in response to this petition, it will soon initiate a rulemaking to update the existing Proposition 65 safe harbor for lead and several related Proposition 65 regulations.  The proposals include several major changes in the way the extent of exposure is calculated and how Proposition 65’s regulatory exemption for “naturally occurring” exemption for foods is determined.  OEHHA’s new proposals essentially seek to nullify the important Beech-Nut precedents and will likely make it even more difficult for businesses to defend Proposition 65 claims about lead and the nearly 300 other chemicals listed for reproductive effects, especially those that may be present as trace contaminants in food products.  OEHHA’s proposals include the following four elements:

A.      Revised Safe Harbor for Lead and Other Chemicals.  OEHHA proposes to repeal the current safe harbor level for lead (the Maximum Allowable Dose Level or MADL).  In its place, OEHHA proposes multiple levels that depend on the frequency of exposure, from exposure once per day to once every 116 or more days.  OEHHA asserts that the once-per-day figure should be reduced from 0.5 to 0.2 micrograms/day and that the existing 0.5 microgram/day level should instead apply only to exposures that occur no more than once every third day.  For exposures that would occur only once every 6 to 9 days, the lead safe harbor figure would rise to 1.0 microgram/day and to higher amounts as exposure intervals become more infrequent.  Plaintiffs’ groups contend that the lead safe harbor should be an order of magnitude lower at 0.03 micrograms per single day and do not want any alternative levels based on frequency of exposure over time.  Despite its proposal for lead, as to all other chemicals listed for reproductive effects OEHHA proposes to eliminate any consideration of the frequency of exposure when safe harbor levels are applied. 

B.      Naturally Occurring Allowances for Lead and Arsenic in Some Foods.  OEHHA also proposes to adopt specific naturally occurring allowances for lead and arsenic (but not other chemicals such as cadmium) in some specific types of food ingredients/products.  The allowances for arsenic are 60 ppb and 130 ppb for white and brown rice respectively.  For lead, they are 8.8 ppb for raw leafy vegetables and 6.2 ppb for raw non-leafy vegetables, fruit, meat, seafood, eggs, and fresh milk.  The agency bases its proposal on data regarding background levels of lead in soil in California as well as rates of uptake by relevant plants. 

C.      Averaging of Product Samples.  OEHHA further proposes to expressly prohibit averaging lead or other contaminant levels across different lots of a food product in the final form it will be purchased by a consumer.  It would instead require that the level of a contaminant in a lot of food be determined by “representative sampling” from within a particular lot.  OEHHA also would define a “lot” on a production basis, apparently by reference to date or production codes, which could significantly increase the amount of testing required.  Testing on this scale may be infeasible for most businesses.

D.      Average Rate of Exposure.  Finally, OEHHA proposes to dictate that, as to any Proposition 65-listed chemical (lead or otherwise), the “average rate of exposure” must always be calculated based on the arithmetic mean and not a geometric mean or some other measure of the central tendency of a data set.  OEHHA’s proposal flies directly in the face of the scientific testimony that prevailed in Beech-Nut and the prior position of the California Attorney General’s office on this issue.

OEHHA has scheduled public hearings to further discuss its new proposals on October 14 and 19, 2015.  It is also inviting written public comment on the lead safe harbor issue until October 28, 2015, and on the averaging issues until November 2, 2015.

Highlights of the Upcoming ACOEL Annual Meeting - NYC

Posted on September 8, 2015 by David B. Farer

On October 15-17, 2015, the Fellows of the American College of Environmental Lawyers will be gathering in New York City for our 2015 annual meeting.

Registration for the annual event has been strong.  Those Fellows who plan to attend, but who have not yet registered, are urged to do so now as deadlines are imminent, particularly for the room block and for the tour described below.

Some of the highlights of this year's meeting are:

  • Thursday afternoon, October 15:  World Trade Center lecture tour and visit to the 9/11 Memorial:  An on-site lecture/tour of the rebuilding of the World Trade Center, emphasizing the environmental aspects of the rebuilding process, followed by a visit to the 9/11 Memorial.  (Registration for this event closes the week of September 7.)
  • Thursday evening:  Welcome Cocktail Reception at the New York Athletic Club, followed by the College's customary dine-arounds.
  •  Friday, October 16:  A full day of business and committee meetings and education sessions at the New York Athletic Club, including:

o   Keynote speech by Jody Freeman of Harvard Law School:  The Obama Administration's Clean Power Plan:  Is it Legal?

o   Crude by Rail: Staying Nimble in Times of Unprecedented Change, presented by Eileen D. Millett (Epstein Becker & Green), James A. Bruen (Farella Braun + Martel), Edward F. McTiernan (New York State DEC) and E. Gail Suchman (Stroock & Stroock & Levan)

o   Big City, Big Environmental Challenges, Big Opportunities, presented by Eric A. Goldstein (NRDC), Daniel Riesel (Sive, Paget & Riesel)  and Nilda Mesa (NYC Mayor's Office of Sustainability)

  •  Friday evening:  Dinner reception at the Lincoln Ristorante, located at Lincoln Center of the Performing Arts, by the Henry Moore Sculpture Pond between the Metropolitan Opera House and Avery Fisher Hall.
  • Saturday morning, Oct. 17:  A half-day of education sessions:

o    Sediment Cleanups: Stuck in the Mud?, presented by John Connolly (Anchor QEA), William H. Hyatt, Jr. (K&L Gates) and Walter Mugdan (U.S. EPA Region 2)

o    Leading Cases and Other Highlights of the Past Year, presented by John Cruden (U.S. Department of Justice) and Robert Percival (Univ. of Maryland School of Law)

  •  Saturday evening:  Jazz Dinner Dance at the Martha Graham Center of Contemporary Dance, located at the historic Westbeth Artists Community in West Greenwich Village, featuring the Manhattan School of Music Jazz Orchestra.

__________

Further details for ACOEL Fellows are available on the ACOEL website.  Here's to seeing many of the Fellows in New York City!

Whole Lot of Craziness Going On

Posted on September 2, 2015 by Richard G. Stoll

A whole lot of craziness is going on in federal district and appellate courts all over the country right now.  About what?  About judicial review of EPA’s recent “WOTUS” rule under the Clean Water Act (CWA).  So I can avoid wheel re-invention, see the very recent ACOEL blogs by Seth Jaffe and Rick Glick.

So what’s the problem?  You might find a lot to hate about the Clean Air Act, the Resource Conservation Act, the Safe Drinking Water Act, and I could name a few others, but at least they all have one good thing going for them:  they all provide in a crystal clear manner that judicial review of EPA’s national rules under those statutes will lie exclusively with the D.C. Circuit.  No ifs, ands, buts, or maybes.

For reasons I have never understood (and I have been trying since the 1970s), Congress in its infinite wisdom chose a different path in the CWA.  In Section 509, they listed seven types of actions that must be reviewed in a federal Court of Appeal (not necessarily the D.C. Circuit) and left any other type of action to be reviewed initially in federal district court.

Over the years, a lot of mixed case law has developed regarding EPA’s CWA rules that don’t fit neatly within one of the seven types of actions Section 509 has specified for Court of Appeals review.  Quite predictably, as reflected in Seth’s and Rick’s recent blogs, three district courts last week reached conflicting results over whether WOTUS fits within the seven types.  In its WOTUS preamble, EPA included a discussion about confusion in the courts over the issue and took no position on whether WOTUS should initially be reviewed in a district court or Court of Appeals.

So how crazy is this:  right now, we have (1) a ruling from one district court judge in North Dakota finding he has jurisdiction and enjoining EPA from enforcing WOTUS; (2) a statement from EPA saying the agency will honor his injunction only in the 13 States that were plaintiffs in that action; (3) an order from that judge directing the parties to brief the issue of whether EPA has authority to honor his ruling in only those states; (4) decisions from two other federal district judges holding WOTUS judicial review must be brought only in a Court of Appeals; (5) numerous cases filed in several circuit Courts of Appeals that have been transferred (at least for now) to the 6th Circuit; (6) an almost certain EPA appeal to the 8th Circuit in attempt to reverse the North Dakota judge’s injunction; and (7) WOTUS review cases filed in numerous other federal district courts by lots of parties with various motions still pending.

This is early September, and I can’t imagine how this won’t get a lot crazier over the next few months.  Congress in its infinite wisdom!