The Conservative Case For Chevron Deference

Posted on January 30, 2017 by Seth Jaffe

With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs.  Put simply, I don’t get it.  There are at least two good reasons why conservatives should prefer Chevron deference to no deference.

First, the alternative is for courts to decide all questions of agency authority.  But haven’t conservatives railed against unelected judges for years?  Bureaucrats are unelected, but at least they work for the elected President.  Isn’t EPA more likely to be responsive to President Trump than federal judges would be?

Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community.  Anyone ever heard of “Regulatory Capture”?

The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.  

The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court.  Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.

Why, then, did the Appeals Court reverse the District Court and affirm the rule?  Chevron deference, of course.

Conservatives, be careful what you wish for.

“Reports of My Death Are Greatly Exaggerated”

Posted on January 27, 2017 by Robert M Olian

So said Mark Twain (actually, he didn’t), and now the same can be said for EPA’s rule exempting water transfers from NPDES permitting requirements. When I last addressed this topic nearly three years ago in “Ashes to Ashes; Waters to Waters – The Death of EPA’s Water Transfer Rule”, a federal district court had just vacated the rule seeking to clarify EPA’s position that transfers of water between navigable bodies of water do not require NPDES permits. See Catskill Mountains Chapter of Trout Unlimited, Inc. v. United States Environmental Protection Agency (SDNY, 3/28/2014)

Displaying a prescience that would make Carnac the Magnificent proud, I closed that earlier post with the assertion that “the only certainty is that litigation over the Water Transfer Rule will continue to flow.” I am therefore personally pleased to report that flow it has, the Second Circuit having now overturned the district court decision in a 2-1 opinion issued on January 18, 2017. The majority opinion upheld EPA's interpretation of the Clean Water Act to exempt water transfers, finding it was a “reasonable construction of the Clean Water Act supported by a reasoned explanation” and was entitled to deferential review under the Supreme Court’s Chevron doctrine.

 Not content to rest on my laurels, I’m going to make another prediction. The Second Circuit won’t agree to rehear en banc and, if certiorari is sought, the Supreme Court won’t take the case. All of which means that, except perhaps for one last post to gloat yet again about my ability to see into the future, this is the last you’ll hear about litigation over the water transfer rule.

Trump Greenlights Keystone and Dakota Access Pipelines, but the Battle is Far From Over

Posted on January 26, 2017 by Patrick A. Parenteau

President Trump wasted no time making good on his promise to reverse President Obama’s efforts to reduce greenhouse gas emissions and move U.S. energy policy towards cleaner energy sources.  On January 24 Trump signed two executive memoranda, one inviting TransCanada to resubmit its application to build the 800,000 barrel a day Keystone XL pipeline from the Canadian oil sands to the Gulf Coast; the other directing the Army Corps of Engineers to expedite the review and approval of the Dakota Access Pipeline (DAPL) to carry approximately 500,000 barrels per day of crude oil from the Bakken shale in North Dakota to oil markets in the United States. But a close reading raises some sticky legal and economic issues that will have to be resolved before the oil starts flowing.  [LINKS to Keystone and DAPL Memos]

In announcing the Keystone Memo, Trump said that approval was contingent on TransCanada’s  willingness to “renegotiate some of the terms” – including perhaps a commitment to use US steel and a share in any profits. The problem is that tar sands oil is not only the dirtiest fuel on the planet, it’s also the most expensive to extract. To be profitable oil prices need to be above $80 per barrel; today they sit around $52, and it is unlikely they will rise much higher in the foreseeable future given the competition from shale oil and the fracking boom that is flooding the market in the US. The break-even point for Bakken shale oil is $29 per barrel. Seventeen major oil sands projects were canceled after oil prices crashed in 2014, as companies took major losses. Major investors in the oil sands have begun to leave, including Norway-based Statoil, which pulled out of the oil sands in December 2016. So cutting a deal to the President’s liking may be harder than it looks.

Assuming the deal goes down, the Keystone Memo issues several directives to clear the way for the project. It directs the State Department to make a final decision within 60 days of the date TransCanada re-submits its application, and it further specifies that “to the maximum extent permitted by law” the final supplemental EIS issued in 2014 shall satisfy the requirements of NEPA as well as the consultation requirements of the Endangered Species Act, and “any other provision of law that requires executive department consultation or review.” The Keystone Memo also directs the Corps of Engineers to use Nationwide Permit 12 to summarily authorize the stream crossings needed to complete the project. These fast track measures are sure to be tested in court by the opponents who are not about to let their hard won victory be snatched away without a furious fight—in the courts as well as in the streets. While courts have ruled that the presidential permit itself is not reviewable, there is presumably no bar to challenging the decisions of the Corps and the Department of Interior that are necessary to complete the project.

The DAPL Memo directs the Secretary of the Army and the Chief of the Corps of Engineers to “review and approve in an expedited manner, to the extent permitted by law and as warranted, and with such conditions as are necessary or appropriate, requests for approvals to construct and operate the DAPL, including easements or rights-of-way to cross Federal areas under section 28 of the Mineral Leasing Act.” The Memo also instructs the Secretary to consider whether to rescind the memorandum issued by the Obama administration requiring preparation of an EIS on DAPL’s   request for an easement to cross Lake Oahe, and to deem the previously-issued Environmental Assessment sufficient to satisfy NEPA.

The Standing Rock protest over DAPL has become an historic confrontation that has united an Indigenous land-and-water movement and climate activism to confront a fossil-fuel corporation protected by a militarized police force.  At one point in December thousands of veterans arrived to provide a safe space for the protesters who call themselves “water protectors.” Litigation filed by the Standing Rock Tribe and other tribes challenging the Corps’ issuance of permits under the Clean Water Act and Rivers and Harbors Act is pending in federal district court in the District of Columbia.  Judge Boasberg denied a preliminary injunction but has yet to rule on the merits of the case. At the moment, the court is considering DAPL’s motion for summary judgment to declare that the project already has all of the approvals it needs and the Corps should not be able to reverse its earlier decision that an EIS was not required. Though the Justice Department has vigorously opposed this move, it will be interesting to see whether the Trump administration adopts a different posture. In any event, the Tribe has raised serious questions about whether the Corps properly evaluated threats to its water supply intake and alternative routes that would lessen the risk. One of the allegations invokes environmental justice concerns arguing that the project was re-routed away from Bismarck in response to concerns about threats to its water supply. The Tribe has also raised novel questions about whether granting the easement would violate treaty rights under the 1851 Treaty of Fort Laramie.

At the hearing on DAPL’s motion for summary judgment, Judge Boasberg acknowledged the uncertainty about what the new administration might do but observed that “It’s not my business to guess.” For now the rest of us will have to guess at what the final outcome of this epic confrontation that has galvanized indigenous peoples from all over the world will be.

The New Administration’s Initial Executive Order and Memoranda On Energy and Environmental Issues

Posted on January 26, 2017 by Theodore Garrett

The Trump administration has issued a key Executive Order and several memoranda relating to energy and the environment.  The goal of the Executive Order -- Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects – is to expedite environmental reviews and approvals.  It provides that action by the Chair of the Counsel of Environmental Quality to designate an infrastructure project as high priority would trigger an expedited review and approval process, as described in the memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.

Two other memoranda – those addressing the construction of the Keystone Pipeline and construction of the Dakota Access Pipeline – are intended to clear the way for approval of these two controversial pipelines.  The President also stated that he wants pipe for U.S. pipelines to be made with American steel.     

Finally, the White House issued a memorandum providing for a regulatory freeze of regulations that have not taken effect and withdrawal of regulations that have not yet been published in the Federal Register. In accordance with this directive, EPA has issued a notice postponing to March 21, 2017 the effective date of 30 regulations that were published by EPA after October 28, 2016.  The delay is intended to provide further review of these regulations by the new Administration.

The Order and memoranda do not change the requirements of relevant environmental statutes.  It remains to be seen to what extent these policies will affect future permitting or regulatory decisions.  Interested parties will wish to carefully monitor how these developments unfold. 

The DOJ Environment Division and State Joint Enforcement

Posted on January 25, 2017 by John Cruden

As I reflect on my tenure as Assistant Attorney General, I have been especially proud of the Division’s cooperation with state and local governments in matters encompassing all aspects of the Division’s work – affirmative and defensive, civil and criminal. When we combine forces with our state and local partners, we leverage the resources of multiple sovereigns and, ultimately, achieve more comprehensive results for the American people.

In 2016, we had unprecedented success in civil enforcement with states, due primarily to the record‐breaking settlement with BP in the Deepwater Horizon Oil Spill litigation. In April 2016, the trial court entered the final consent decree in the litigation, thereby resolving civil claims of the United States and the five Gulf Coast states against BP. The claims arose from the 2010 blowout of the Macondo well and the resulting massive oil spill in the Gulf of Mexico. BP will pay the U.S. and the five Gulf States more than $20 billion under the consent decree, including: 1) a $5.5 billion civil penalty; 2) more than $8.1 billion in natural resource damages; 3) $600 million in further reimbursement of clean‐up costs and some royalty payments; and 4) up to $6 billion in economic damage payments for the Gulf States or their local units of government. This resolution is the largest settlement with a single entity in Department of Justice history; it includes the largest civil penalty ever awarded under the Clean Water Act, the largest ever natural resources damages settlement and massive economic damages payments to our state partners.

And, just this month we announced our plea agreement and civil consent decree with Volkswagen.  In addition to the combined $4.3 billion penalty, corporate felony plea, and individual prosecutions, the previous civil consent decrees also provide $2.7 billion to all states for projects they select from the CD options to offset NOx pollution caused by the illegal car emissions.  When the various settlements with VW are combined, and their value estimated, it approaches $20 billion. 

Our state connections were vital to our criminal work. Cooperation ranged from providing training to state partners to close coordination in wildlife and pollution investigations.  Prosecutors from ENRD’s Environmental Crimes Section presented at several events where state investigators learned of opportunities and methods for developing wildlife and environmental crimes cases, either in concert with federal counterparts or independently. Our prosecutors also trained their counterparts on the Division’s recently acquired authority over worker safety matters.

But environmental enforcement is not where ENRD’s work with state and local partners ends. We also are working with our counterparts at the state and local level in a relatively new area of responsibility for the Division – civil and criminal enforcement of federal laws that provide for humane treatment of captive, farmed, and companion animals across the United States. In July 2016, ENRD and the Office of Justice Programs co-hosted a roundtable discussion on Animal Welfare Enforcement. We were joined by more than 100 leaders in the area, including representatives of federal agencies, states and local governments, as well as researchers, scientists and others in the animal welfare field. The roundtable allowed us to focus collectively on information sharing, organizational strategies and cooperation in animal welfare enforcement.

Finally, ENRD continued to develop and enhance relationships with our state counterparts by participating in several forums designed to share experiences and expertise. In the spring of 2016, for example, I had the honor of being the first ENRD Assistant Attorney General invited to speak to the annual meeting of the Environmental Council of the States, the national association of state and territorial environmental agency leaders. I joined colleagues from EPA, New Mexico and academia to discuss innovative ways to measure the success of environmental enforcement. ENRD attorneys also partnered with the National Association of Attorneys General to present webinars on topics of mutual interest, such as e‐discovery, and share expertise regarding federal bankruptcy law in the context of environmental cases. Finally, just this week we collaborated with the National Association of Attorneys General to publish Guidelines for Joint State/Federal Civil Environmental Enforcement Litigation, which is now available on the DOJ website.

As I depart from the Division, we are in good shape. In December, the Division accepted an award by the Partnership for Federal Service, which ranked the ENRD as the #2 best place to work in all of the federal government, as well as the best place to work in the Department of Justice. With more than 300 Federal agency subcomponents competing, our new rank places us well into the top 1% of all Federal workplaces.

Bears Ears Monument Designation Was the Right Decision at the Right Time

Posted on January 24, 2017 by Zach C. Miller

On December 28, 2016, President Obama by Proclamation under the federal Antiquities Act designated 1.35 million acres of federal lands in southeastern Utah as the Bears Ears National Monument.  That action culminated nearly a century of efforts to protect this unique, canyon-country site, which is archaeologically rich, ecologically diverse, and the ancestral homeland of a number of southwestern Indian tribes.

Immediately after this designation, the Utah governor and congressional delegation, some local officials, and various conservative pundits railed that the designation was an illegal and inappropriate “federal land grab,” was done without proper public input, will unduly impede traditional tribal and local activities, and can and should promptly be reversed and rescinded by the incoming Trump Administration.

Each of those claims has no factual or legal merit.  The most recent Bears Ears proposal was initiated several years ago by local Navajo leaders and formally endorsed by the Navajo Nation and four other tribes whose ancestors inhabited this area, as well as other local and national Indian and conservation groups.  It has been thoroughly vetted for several years and was the subject of a number of public meetings throughout 2016, including several local meetings attended by Interior Secretary Jewell.  As a result of that extensive public input, the Obama administration excluded over 600,000 acres of initially-proposed lands that contain oil and gas leases, existing and prospective uranium mining sites, limestone quarries, grazing areas, local water supply watersheds, and other objected-to areas.  The designation also expressly protects all valid existing rights, preserves access by Native Americans for traditional uses such as sacred ceremonies and gathering plants and firewood, and creates an Advisory Committee of state, local, and tribal representatives and private landowners to provide information and advice to BLM and the U.S. Forest Service in their joint administration of the monument and development of appropriate management and transportation plans.  As a result, the principal existing activities that will be restricted within the designated Monument are the ongoing illegal theft and vandalism of federal and tribal archaeological sites.

The Proclamation also uniquely creates a Bears Ears Commission consisting of an official from each of the five Native American tribes with historic ties to the area, to provide guidance and recommendations on the management of the Monument and related plans.  This is the first, and long-overdue, instance of Native American tribes being directly involved in coordinating with federal agencies to manage a monument that protects sacred sites on their ancestral homelands.

Regarding whether this action is a proper use of the Antiquities Act, it is widely acknowledged that this area contains one of the densest and most significant concentrations of archaeological and paleontological sites and specimens in North America.  It is also uncontroverted that historic sites in the area have been extensively looted and vandalized over the last century.  The FBI has conducted major enforcement actions against illegal “pot-hunters” in this area, including as recently as 1986 and 2009.  Complaints that state and local officials can better protect against such theft and vandalism ignore that most illegal pot-hunters have been local denizens and that, until fairly recently, the University of Utah museum was a major purchaser of the pilfered artifacts.  Providing federal protection to these highly-jeopardized antiquities on federal public lands is precisely what the Antiquities Act was designed and intended to do.  Far from being improper, this protective measure is long overdue.

In terms of timing and process, the Administration waited patiently until a long-pending legislative alternative proposal to protect the area failed in Congress.  That bill, introduced by Utah Congressman R. Bishop and dubbed the Public Lands Initiative (PLI), would have put 1.4 million acres into two National Conservation Areas (NCAs) and a separate wilderness area, but it provided less protection and increased state and local control over uses in the NCAs, with no direct tribal involvement.  But that bill failed to move through Congress before it adjourned.  In addition to waiting for completion of that legislative process, by reducing the monument designation from the initially proposed 1.9 to the final 1.35 million acres, the Obama Administration also largely aligned the boundaries of the final monument designation with those of the failed PLI proposal and excluded the central areas of objection.

Regarding the proposal for the incoming Trump Administration to administratively rescind this designation, there is no legal authority for the President to do so.  The Antiquities Act authorizes a President to designate an area as a national monument on federal lands when necessary to protect the appropriate sites and resources.  It does not authorize a President to rescind a designation made by some predecessor, and no President has ever done so in the 111-year history of the Act.  The Attorney General in 1938 formally opined that the Act does not provide for such rescission, and nothing has changed that would alter that conclusion.  The Congressional Research Service recently confirmed the absence of any such authority or precedent.  Republican Party members would also do well to recall that the Antiquities Act was signed in 1906 by its own conservation hero, Teddy Roosevelt, who used it to designate 18 monuments in three years, seven of which later became popular national parks, including at the Grand Canyon.  All but three presidents since that time have done the same.  As was the case with all those actions by Teddy and others, after all the immediately-following outrage and uproar, this measured Bears Ears designation will no doubt later be acknowledged as a brave, innovative, and critical action to protect this long-vandalized and currently-threatened area.

In sum, the recent designation of the Bears Ears Monument was the right decision at the right time for the right reasons, and there is no legal basis to rescind or restrict it without an act of Congress.  The incoming Administration and Congress should not heed recent partisan, emotional calls to try to undo it and should instead work with the new tribal Commission and all affected stakeholders to develop a fair and appropriate management plan for the new Monument.

AND A WATERSHED RUNS THROUGH IT

Posted on January 19, 2017 by Michael M. Meloy

My roots are in central Pennsylvania near the dividing line between the Susquehanna and Potomac watersheds.  The creeks follow the valleys, flowing away from each other and carrying water that will ultimately rejoin in the Chesapeake Bay.  It is a rich agricultural area with a farming legacy that goes back to the mid-1700s.  It is also ground zero for the continuing struggle to improve degraded water quality in the Chesapeake Bay, one of biological jewels of the eastern United States. 

One of my best friends is a dairy farmer.  He has faithfully carried on a family tradition reaching back over multiple generations.  He is an excellent farmer.  He finally sold the dairy herd this fall, buffeted by plunging milk prices and lack of help in shouldering the relentless grind of running a dairy operation.  The barn where I have spent hundreds of hours over the course of my life now stands empty and quiet.  The cows are gone and the milk tank is dry.  Unfortunately, this is a story that is repeating itself with remarkable regularity as the number of dairy farms continues to shrink both in Pennsylvania and elsewhere in the country.

For those with a single-minded focus on water quality in the Chesapeake Bay, the demise of another dairy farm in Pennsylvania may be a cause for quiet celebration.  Even though Pennsylvania does not border the Chesapeake Bay, the Susquehanna River drains approximately 46 percent of the state, including some of its most productive farmland.  The Susquehanna River contributes almost half the fresh water to the Chesapeake Bay.  The Bay and the River are inextricably linked. 

In 2010, the United States Environmental Protection Agency issued a total maximum daily load (TMDL) for the Chesapeake Bay focusing on loading rates for nitrogen, phosphorous and sediment.  EPA identified agriculture as a key contributor of these pollutants.  Each state within the Chesapeake Bay watershed, including Pennsylvania, is attempting to figure out how to achieve the targets that EPA has set for reductions in nitrogen, phosphorous and sediment.  The process is fraught with difficulties, pushing the envelope of technical feasibility, legal permissibility and political acceptability.  The process is also underscoring the limitations of the tool box under the Clean Water Act to solve truly complex and multi-dimensional water quality problems.  

If the goals that EPA has set for water quality in the Chesapeake Bay under the TMDL are to be met, a financially-sustainable agricultural sector is vital to that outcome.  Runoff of nutrients and sediment from farms may be the immediate focal point but crafting solutions that will facilitate farms being able to operate in the future is critically important to the long-term health of the Chesapeake Bay.  If farming operations are forced under, prime farmland will change use and be taken out of production.  Development of former farms and the runoff from such development carries its own challenges for water quality in the Chesapeake Bay.  Moreover, rolling back changes in land use after they have occurred is almost impossible to achieve. 

Preserving farming operations holds significance extending well beyond water quality.  In the coming decades, food production is likely to become one of the key issues that not only our country but the world will face.  Loss of farms also alters the fabric and social bonds of rural areas in many detrimental ways.  

On January 6, 2017, the Chesapeake Bay Foundation released its 2016 State of the Bay Report, a bi-annual evaluation of the health of the Chesapeake Bay.  While the Chesapeake Bay received failing grades on certain key metrics, the overall health of the Bay received a grade of C-, the highest grade that the Chesapeake Bay Foundation has given since it began making such assessments more than 30 years ago.  Progress is being made – slowly and painfully but surely.  At the same time, Pennsylvania, Maryland and Virginia have collectively lost more than 600,000 acres of farmland (about half the size of the Delaware) since 2002.  One can only hope that the twin goals of saving the Chesapeake Bay and saving agriculture in the Chesapeake Bay watershed can harmoniously coexist.

Why Reject Chevron?

Posted on January 18, 2017 by Edward F. McTiernan

The outcome of the recent presidential election appears to have been based, at least in part, on the fact that some portion of the electorate felt that out-of-touch and unelected government regulators cannot be trusted to solve problems because they either are making things up (coal-fired power plants contribute to climate change) or caused the problem in the first place (over reaching while delineating “waters of the US”).  Environmental regulations and their human analog - health and safety standards - are viewed in some quarters as the height of paternalism by our government and are often cited as the sort of regulatory morass that only a self-serving, arrogant bureaucracy could concoct.  One response to the perceived negative effect of regulations in general, and environmental regulations in particular, has been a call to ‘increase regulatory accountability’ and to ‘restore the proper role of elected officials.’

The Regulatory Accountability Act is one notable legislative response to these concerns.  In 2016, it was a one-house bill that was not acted upon by the Senate.  That could change and the Regulatory Accountability Act of 2017 (H.R. 5) has already been introduced (on January 3, 2017).  Title II of this omnibus legislation includes the “Separation of Powers Restoration Act” which would overturn Chevron U.S.A. v. NRDC, 467 U.S. 837, (1984) as well as Auer v. Robbins, 519 U.S. 452 (1997) by amending the Administrative Procedures Act, 5 USC 706, and requiring that federal courts “shall decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.”.  (Chevron and Auer are often seen as two sides of the same coin; the Chevron test calls for deference to an agency’s reasonable interpretation of a statute while Auer requires strong deference to an agency’s interpretation of its own regulations.  Of course, these tests only come into play after a searching review of the language and history of the enabling legislation fails to reveal Congress’ intent.)

Although the logic behind Chevron has been questioned by many, including Justice Scalia, overturning Chevron as a means of restoring the separation of powers seems like an odd way of attempting to increase the power of the people’s elected representatives and restoring accountability.  After all, deference favors stakeholders who support an administrative determination (including decisions to issue a permit or adopt a less stringent emission standard).  In the environmental area, where well-funded non-governmental membership organizations routinely challenge rules and permits, the benefits of Chevron to the regulated community are easy to overlook.

In any event, one of the key arguments in favor of Chevron deference is that when Congress decides to leave implementation of legislation to an executive agency, and Congress also leaves gaps or ambiguity in a statute, filling the gap or resolving the ambiguity necessarily involves policy judgments.  Putting aside questions of whether Congress can ever avoid the problem by eliminating legislative gaps or ambiguity; as a general matter Chevron deference reflects a decision that such judgments are best left to the executive agency that is most steeped in the subject matter at issue.  There are at least two primary reasons that courts use to explain why Chevron and its progeny leave these judgments to executive agencies - presumed expertise and greater accountability.  Indeed, even taking into account the newly popular idea that the presumed expertise of experts to solve real-world problems should be continuously challenged (or at least deeply discounted), many judges may still favor deference on the theory that policy judgments are generally not for the courts precisely because they are better left to the executive branch which (unlike our independent judiciary) is, to a degree, answerable to the popular will at election time.

Replacing Chevron with de novo judicial review would very likely result in greater uncertainty as generalist judges with life-time tenure are called upon to exercise their judgments concerning policy decisions made by specialized executive agencies directed by an elected representative of the people.  Moreover, environmental cases typically present mixed questions of fact and law.  Courts would need time to sort out when and how to integrate de novo review of legal determinations with the substantial evidence test for formal rules and adjudications and the arbitrary and capricious standard as applied to agency guidance and informal rules. Replacing Chevron will also probably lead to more litigation (and forum shopping) as stakeholders perceive greater prospects for success.

Of course, uncertainty and litigation are not necessarily bad - if they result in improved decision-making and they help restore common-sense outcomes.  However, given the inevitability that the Environmental Protection Agency will be called upon to make policy judgments when Congress intentionally leaves gaps or unintentionally creates ambiguity, predictability has benefits.  This is where the new ‘accountability’ at the core of Title II of the Regulatory Accountability Act of 2017 seems to fall short.  It is not clear how shifting the review of administrative actions from the elected executive branch to the insulated judiciary will increase predictability or accountability.  Even taking into account the other parts of this legislative package (including the direction that agencies must select the lowest cost alternative and increased reliance of the administrative record), it is far from certain that this proposed legislative fix will increase the power of the people’s elected representatives or provide a net benefit to the regulated community on environmental issues.

There is much to be done to improve participation and increase transparency in environmental decision-making at both the state and federal level.  However, until someone comes up with something better than de novo judicial review, doing away with the familiar two-step Chevron analysis for determining legislative intent could prove to be a difficult place to start.

The NSR Regulations Still Make No Sense: The 6th Circuit Reverses the DTE Decision Based on a 1-Judge Minority Opinion

Posted on January 17, 2017 by Seth Jaffe

Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations.  According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.

One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point.  What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.

How could such a thing happen, you might ask?  Here’s the best I can do.  Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained.  Judge Rogers disagreed and dissented.  Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety.  However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1.  The law remains an ass.  

Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.

And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.

Playing Nice with Others – EPA and State Cooperation In Today’s World

Posted on January 12, 2017 by Robert J. Martineau Jr.

As the Obama Administration comes to an end and the Trump Administration is about to begin, I want to reflect on the current relationship between EPA and state environmental agencies.  I have been active in the environmental law arena for over 30 years, in private practice, in the Office of General Counsel at EPA, and for the past six years as a state environmental commissioner.  In addition, for four of the past six years, I served as an officer for the Environmental Council of States (ECOS).  In each of those roles, I have witnessed the give and take relationship between EPA and state environmental agencies. 

This has not been a static relationship.  Over the past few years, the working relationship between state agencies, ECOS, and EPA has improved substantially - even when strong differences concerning particular regulatory initiatives or policies exist.  For example, even those states opposed to EPA’s Clean Power Plan rule readily acknowledge that EPA’s outreach to stakeholders, and especially their state partners, was unprecedented.   In many other cases, Administrator McCarthy and her team worked collaboratively as partners with states in addressing an issue.   Indeed, it has become the way to do business.   This change in culture across EPA is due in large part to the efforts of EPA Administrator Gina McCarthy, and current and former Deputy Administrators Stan Meiburg and Bob Perciasepe.  Together they reached out to states, brought them to the table and found committed, willing partners in ECOS members.  They listened and treated states as equal partners.   Their leadership made clear that all parts of EPA should follow that partnership model.   

Truly, the relationship between EPA and the states has matured to a working relationship of joint governance.  One of my state colleagues has commented that if you said “co-regulator” to EPA ten years ago, they would flinch. Today, states and EPA leaders use that term freely and are engaged in many projects together as partners to protect public health and the environment in an efficient and cost effective way.   We have moved from a parent- child relationship to equal partners.   This has been a positive both for state and federal entities, but also for regulated industry, environmental organizations, and the public. 

As Administrator McCarthy and her leadership team prepare to depart, it’s clear that the new Administration will have different policy goals.  That is the consequence of elections and change of Administrations.   Regardless of the substantive policy decisions that will be confronted in the days ahead, I hope the efforts made over the past few years by Administrator McCarthy and her team to foster a more collaborative approach between EPA and the states will continue.   

New Jersey Legislature Seeks to Protect NRD Recoveries, Flora, Fauna, … and Food Trucks

Posted on January 10, 2017 by Kenneth Mack

On December 19, both houses of the New Jersey Legislature adopted a resolution proposing an amendment to the New Jersey Constitution which would basically gather all Natural Resource Damages funds into a single account or in the words of the resolution:

 “credit annually to a special account in the general fund an amount equivalent to the revenue annually derived from all settlements and judicial and administrative awards relating to Natural Resource Damages collected by the State in connection with claims based on environmental contamination.”

These amounts would be “dedicated” and

“appropriated … by the legislature, for paying for costs incurred by the State to repair, restore or replace damaged or lost natural resources of the State or permanently protect the natural resources of the State, or for paying the legal or other costs incurred by the State to pursue settlements and judicial and administrative awards relating to natural resource damages.” 

Up to ten percent of the monies so appropriated could be expended for -- you guessed it -- “administrative costs of the State or its departments, agencies, or authorities for purposes authorized in this paragraph.” 

By way of background, the New Jersey Spill Act declares the State to be “the trustee, for the benefits of its citizens, of all natural resources within its jurisdiction” (N.J.S.A. 58:10-23.11a).  In the last (Democratic) State administration, the State brought a number of massive suits, notably involving the Passaic River and ExxonMobil, which resulted in some 355 million dollars in settlements.  The proceeds of the settlements were used by the Christie administration to balance otherwise deficit ridden State budgets. Although these shortfalls were caused mainly by the expenditures of the very same legislators (and their antecedents), this budgetary gap- plugging by a Republican was pilloried by the Democratically-held legislature (among others). The legislature nonetheless approved the transfer of these monies to the State’s general fund, making them usable for any purpose.  NGOs and, to some extent, municipalities in which the natural resource damages occurred, complained that not much was being spent on the environment, in general, or “restoration” projects in such municipalities, specifically.  Under New Jersey law, the only way to stop the Governor or legislators from “raiding” such recoveries at will is by way of constitutional amendment, so an effort to adopt one was necessary.  Hence, these resolutions.

A number of the most significant recoveries were obtained via (amply compensated) outside counsel.  Thoughtfully,  the proposed amendment includes a provision allowing for the compensation of such counsel in pursuing natural resource damages on behalf of the State.  At least one NGO had another idea, and advocated that the New Jersey Department of Environmental Protection (“DEP”) be empowered simply to assess Natural Resource Damages, thereby avoiding any expense for outside counsel or, presumably, such mundane concerns as due process and like concepts.  Thus the inclusion of the phrase “administrative awards” in the proposed amendment.

Since the resolutions were adopted by a super majority of both houses, the amendment will now be put to a State-wide vote next November.  Whether it will actually be adopted remains to be seen.

And what sort of projects might be funded by these monies?  Recently, the DEP announced the award of a number of grants totaling $53 million to communities along the Passaic River, Raritan Bay, and tributaries, mostly drawn from settlement monies received in its Passaic River litigation.  These grants resulted from a “competitive process” and are largely, although not entirely, intended to enhance public access to these polluted waterways.  The various “improvements” to be funded by these grants include parks, elevated riverine walkways, docks, boathouses and launches, parking lots, and, in the town of Harrison, a “food truck plaza”, along with “wetland creation.”  Presumably then, at least in the view of DEP, preservation of food trucks goes hand-in-hand with natural resource protection.

Hey, it’s Jersey, you got a problem with that?

Old Cases – Old Friends

Posted on January 6, 2017 by John A. McKinney Jr

I was an Adjunct Professor on the Seton Hall School of Law faculty teaching New Jersey Environmental Law.  Although I retired from that position after 18 years, I still anticipate the upcoming Spring Semester.  At this time of year, I would have completed my syllabus and would be preparing for my classes, one of which would include a discussion of P. Ballantine & Sons v.  Public Service Corp. of New Jersey, 70 A. 167 (N.J. Sup. Ct. 1908) (“Ballantine”).  This case is both an old friend and a decision reaching the right environmental law result long before there was something called environmental law.

The plaintiff was a major brewery in Newark.  The defendant was a large corporation that owned a neighboring illuminating gas manufacturing plant.  Both parties retained well-known lawyers whose names are, even today, in the names of two law firms active in New Jersey.  From a legal viewpoint, Ballantine was a battle between two titans of industry using top counsel. 

The holding in the case is simple.  “If a landowner accumulates contaminating matter upon his land, and negligently permits it to percolate through the soil and pollute a neighbor’s well, he is liable for the injury.”  In a jury trial below, the brewer prevailed and was awarded $20,725 in compensatory damages (over $5.5 million in today’s dollars).  The facts were not so simple and the gas company appealed, primarily on the basis that the verdict was against the clear weight of the evidence.

In the case below, the brewery proved it drew about 7,800 gallons of water a day from two wells on its property to make its beer and porter.  The water purity and temperature had been perfect until late 1902 or early 1903 when “it had given off a perceptible gaseous odor which, however, did not affect its usefulness for plaintiff’s purposes.”  Although that may say something about the taste of beer in the early 20th century, by July of 1903, there was a “sudden appearance” in the water of gas tar, a by-product of illuminating gas manufacture, making the wells useless for making beer and porter.  The brewer procured another supply of water and sought its procurement costs.  The gas plant contended there was conflicting evidence as to the source of the pollution.

Here is where Ballantine is “modern.”  The case became a battle of the experts as to material identification and fate and transport issues.  There was testimony a predecessor owner of the gas plant dumped coal gas tar in the river and that it “was drawn or flowed there between the strata of rock which dip from the river towards the wells.”  In an early anticipation of Daubert, the Supreme Court panel said this was “all theory, and seems to be inconsistent with what we understand the proof shows to have been the fact that the tar in plaintiff’s wells was oil gas tar.”

The record showed oil gas tar was stored in tanks and moved through pipes in “the possession and under the control of the defendant and within its peculiar knowledge.”  The court found that, in these circumstances, negligence could be inferred and the costs were not excessive.  The appeal was “discharged, with costs.”

I will miss teaching from this little gem.  As we discussed it in class, I projected a slide show for the students showing a latter Ballantine Brewery, its delivery trucks and other Ballantine memorabilia.  We got into the history of the two parties after the case as well as their impacts on the City of Newark and the state.  We talked about New Jersey law and its early rejection of Res Ipsa Loquitor.  I told them one of the Justices on the Ballantine panel went on to preside over New Jersey’s most famous trial, the Bruno Hauptmann/Lindberg baby kidnapping case.  Ballantine elicited from me and from my law students all the things that made teaching fun.  I will miss my old friend. 

“What’s past is prologue” —William Shakespeare, The Tempest

Posted on January 3, 2017 by Joseph Manko

I first began to focus on the need to protect our environment in the 1960’s, starting with Rachel Carson’s indictment of one particular pollutant, the pesticide DDT in her seminal work, “Silent Spring.”  As the decade of the ‘60’s proceeded, environmental protection began to focus on the local release/discharge of contaminants into the air, ground and water.  Each state dealt with these problems in a scattershot manner until the EPA was formed in 1970 to administer laws passed by Congress to be uniform – commonly called “command and control.” 

On Wednesday, October 17, 1973, the Arab-dominated Organization of Petroleum Exporting Countries (“OPEC”) decided to reduce the exports of the most basic transportable fossil fuel – oil - to the United States and other countries who aided Israel during the Yom Kippur.  This was commonly called the “OPEC Embargo” and exposed our national dependence on Mideast oil.  

Against this backdrop, on Monday, October 15, 1973, I left my corporate law practice and took my “Hamiltonian shot,” becoming EPA Region 3’s general counsel.  I joined the newly created EPA under Administrator Russell Train to implement, apply and enforce the new environmental statutes - the Clean Water Act (CWA–1972), Clean Air Act (CAA-1970) and National Environmental Policy Act (NEPA-1969).  Instead, because of the OPEC embargo, I was processing CAA variance requests to burn wood chips in furnaces in Philadelphia and fill my gas tank on alternative weekdays.  When the embargo ended the following year, we went about achieving EPA’s mission to protect the environment and coordinate the three E’s – the economy, ecology and energy – focus on the latter would grow in importance – and argument – in the years to come.   

I left my position in October 1975 and started a private practice in environmental law and later began to teach environmental law.  Along came the Safe Drinking Water Act, the Resource Conservation and Recovery Act (“RCRA”), and on the eve of President-Elect Ronald Regan’s inauguration, the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”).  The federal government was clearly on track to achieve its mission.

In January 1981, however, President Regan determined to “reverse” environmental protection by the federal government and return it to “state control,” welcoming to this cause a number of inexperienced, unqualified and hostile political friends to dismantle the federal program.  The result – James Watt left his Secretary of the Interior post in disgrace on October 10, 1983; EPA Administrator Anne Gorsuch resigned in disgrace on March 9, 1983; Rita Lavelle, the EPA Assistant Administrator for Hazardous Waste and Superfund, wound up serving prison time for lying to Congress; and at least one Regan appointed EPA regional administrator was thrown out of office. 

During the twenty-eight Bush/Clinton/Bush/Obama scandal free years, EPA went about its business of environmental protection, leading up to the presidential election of October 2016.  The near unanimous global and scientific recognition that climate change was happening led to efforts to reign in carbon emissions primarily from the burning of fossil fuel (coal and oil), culminating this fall in the Paris Agreement.  President Obama and Secretary of State John Kerry led the successful fight to get the requisite number of countries to sign on with the United States.  Environmental protection became a global need, no longer a local problem.

And then came November 8, the election of Donald Trump. 

As he proceeded to name the people he wanted to make up his cabinet, speculation began as to whether as President-Elect he would actually activate his campaign attacks on environmental protection.  Now almost a month before his inauguration, he has actualized his campaign promises.  First, he selected Oklahoma attorney general Scott Pruitt as EPA Administrator, a climate change denier who led the attack in court on President Obama’s Clean Power Plan (the vehicle US planned to use to reduce carbon emissions from fossil fuel in fulfillment of its Paris Agreement commitment).  Second, he tapped Rex Tillerson, the CEO of ExxonMobil, the world’s largest fossil fuel producer and defendant in NY v. Exxon, to be his Secretary of State.  Third, for Energy Secretary, he has designated Texas Governor Rick Perry, the man who in his 2011 campaign famously forgot that the third federal agency he would abolish was the Department of Energy.  Finally, with these selections, he has made it abundantly clear that he meant what he said about reeling in the EPA. 

Will he succeed during his administration or will he fail in his efforts to reprise the Reagan assault.  Some of the big differences between the 1980’s and today are (1) environmental degradation is now understandably global, not just local, (2) the rest of the world is similarly impacted and is watching us, and (3) the stakes are much higher.  Will Congress permit a legislative dismantling of the statutory structure it put together over the past 45 years?  Will the myriad environmental NGOs be strong enough (and sufficiently funded) to take these attacks to court?  Will EPA be able to preserve its regulatory program to implement environmental protection?  Will the courts uphold these executive anti-environmental attack efforts or stop them?  And in that regard, who will be Trump’s selection of SCOTUS Justice #9? 

We wonder.  Many of us worry.  And all of us wait.