Massachusetts Brownfields Update—Appeals Court Holds Nonprofits May Receive Tax Credits, With No Deference to Agency’s “Incorrect Statutory Interpretation”

Posted on February 22, 2018 by Ruth H. Silman

The Massachusetts Brownfields Tax Credit program allows individuals and businesses a credit against their state personal income tax or corporate excise liability for a percentage of the costs incurred for environmental response actions that result in either a “permanent solution” or “remedy operation status” under the Massachusetts remediation regulations.

As enacted in 1998, the Brownfields Tax Credit program excluded non-profits because they would have no income tax liability.  But in 2006, the Legislature amended the program to allow taxpayers to transfer the Brownfields Tax Credits and so non-profits were added, enabling those entities with insufficient tax liability to benefit from the program in the same manner as for-profit companies and other taxpayers.  Importantly, the 2006 amendment made all recipients of tax credits eligible for a percentage of response costs incurred retroactively to August 1, 1998.

The program thrived between 2006 and 2012, but this activity drew the attention of politicians due to the significant drain on the budget.  In late 2012, the Massachusetts Department of Revenue (MassDOR, the agency administering the Brownfields Tax Credits program) received applications from three local colleges—Northeastern University, Boston University, and Wellesley College.  These three applications totaled almost $20 million.  This proverbial straw across the camel’s back caused MassDOR to reevaluate the program. 

In 2013, MassDOR abruptly changed its practice. It issued a “clarification” known as Directive 13-4 “Guidance with Respect to Brownfields Tax Credit Applications”.   Directive 13-4 stated that a non-profit organization may receive a credit based upon documentation of a permanent solution or a remedy operation status submittal only for taxable years that commenced on or after June 24, 2006, the date that non-profits were added to the program.  Furthermore, MassDOR would apply Directive 13-4 to all pending and future applications.  Relying on Directive 13-4, MassDOR denied the claims from the three universities.

The three universities (along with a private party) sued MassDOR.  In 2016, the trial court ruled for the plaintiffs, holding that Directive 13-4 was “unreasonable” and that MassDOR’s “denial of the applications based on that directive was unlawful”, based on the unambiguous and explicit language of the statute.  On December 28, 2017, the Massachusetts Appeals Court affirmed the trial court’s decision, holding that if the Legislature had intended to limit the timeframe for eligibility of nonprofit organizations’ applications, “it certainly knew how to do so.”  In the absence of direct language in the statute supporting the agency interpretation, the Appeals Court found that MassDOR’s interpretation in Directive 13-4 was entitled to no deference due to its “incorrect statutory interpretation.” 

MassDOR has applied for further appellate review by the Supreme Judicial Court, but it appears that MassDOR is now busy processing all of the nonprofit applications that have been languishing since 2013.  Perhaps the colleges, universities, hospitals, and other nonprofits will finally receive the equal treatment that they so rightly deserve.

More Guidance on Guidance: DOJ Will Not Enforce “Improper” Agency Guidance Documents

Posted on February 21, 2018 by Seth Jaffe

In November, Attorney General Sessions issued a memorandum prohibiting DOJ from issuing regulations disguised as guidance.

Folders with the label Regulations and Guidelines

Now, DOJ has taken the prohibition a step further.  It will no longer rely on guidance issued by other agencies when taking civil enforcement action.  The memorandum has made the regulated community and the NGO community sit up and take notice.

I am sympathetic to the concerns raised in the Sessions memo.  I hate circumvention of notice and comment rulemaking by guidance.  However, as I noted when the memo was released, the problem with guidance documents is not how they are drafted; it’s how they are implemented.

For example, the new memorandum states that:

The Department may continue to use agency guidance documents for proper purposes in such cases.  For instance, some guidance documents simply explain or paraphrase legal mandates from existing statutes or regulations.

Well, but in the first instance, who decides whether a guidance document “simply explains or paraphrases legal mandates” or whether it instead “purports to create rights or obligations binding on persons or entities outside the Executive Branch”?

The agency does, of course – perhaps aided by its counsel, DOJ.

This will particularly be an issue where guidance has been in place for many years and has been relied on by both an agency and the regulated community as accurately describing what the law actually is.  Take, for example, the New Source Review Workshop Manual.  The Manual is not only not a regulation; it’s been in draft for 28 years.  Nonetheless, it’s been relied on as the bible for practitioners since then.  It might be exempt from this policy, which makes clear that it does not apply to internal training materials.  However, when internal training materials are used to say what the law is, that sounds like regulation masquerading as guidance to me.

Here’s another issue.  What are the implications of this guidance memorandum for cooperative federalism?  In a delegated program, what happens if states continue to rely on guidance documents in enforcing federal obligations?  Are we going to have one interpretation under federal law and another interpretation under state law?  Can you say “forum shopping”?!

Finally, I cannot resist pointing out the irony inherent in the AG issuing two separate guidance documents on the proper – and improper – use of guidance documents.

“It’s What We Know for Sure That Just Ain’t So”

Posted on February 16, 2018 by Paul Seals

In his current bestseller, 12 Rules for Life: An Antidote to Chaos, Jordan B. Peterson, a clinical psychologist and University of Toronto professor of psychology, quotes Mark Twain in discussing the potential consequences of our conventional assumptions regarding nature and the environment. Mark Twain once said, “It’s not what we don’t know that gets us in trouble. It’s what we know for sure that just ain’t so.” In our current period of environmental regulatory conflict and chaos, Dr. Peterson’s rules could be fruitful in thinking more critically about “what we know for sure” and in advancing the sort of discourse that can help us find our way to a more rational and orderly regulatory consensus.

Dr. Peterson presents informative, fascinating, and often humorous prescriptions on how we should approach the disorder and tumult in the world in order to achieve meaning in our lives. His provocative and controversial assertions are woven through essays on each of his twelve rules:

  1.  Stand up straight with our shoulders back.
  2.  Treat yourself like someone you are responsible for helping.
  3.  Make friends with people who want the best for you.
  4.  Compare yourself to who you were yesterday, not to who someone else is today.
  5.  Don’t let your children do anything that makes you dislike them.
  6.  Set your house in perfect order before you criticize the world.
  7.  Pursue what is meaningful (not what is expedient).
  8.  Tell the truth—or, at least, don’t lie.
  9.  Assume that the person you are listening to might know something you don’t.
  10.  Be precise in your speech.
  11.  Do not bother children when they are skateboarding.
  12.  Pet a cat when you encounter one on the street.

We could use a little of Rules 7, 8, and 9 as we grapple with the significant environmental regulatory controversies that we face. We have competing facts and assumptions to support our contentions. We are in our separate corners armed with our arguments and beliefs, with little room for honest debate, dissent, or compromise. Too often, we become the conscious or unconscious proxies of ideological tyranny. Orthodoxy, dominance, and power are more important than advancing our knowledge to further effective and appropriate public health and environmental regulations.

We need to do a little more listening combined with a humility that what we know for sure may not be so. The challenge is great. We must overcome the straightjacket of our ideology and follow Rules 7, 8, and 9—beginning with the assumption that the person you are listening to might know something you don’t.

Prizes for Progress with a Caveat: DOE Offers $3 Million Incentive

Posted on February 15, 2018 by Irma S. Russell

The U.S. Department of Energy (DOE) recently announced a $3 million prize competition for solar energy manufacturing innovations.  The American Made Solar Prize, seeks to encourage innovation in solar manufacturing in the private sector.  Given the urgency of the threat of climate disruption, incentives for a green energy industry are definitely a good thing.  

In 2017 the U.S. Global Change Research Program Climate Science Special Report reported key findings, including stronger evidence of “rapid, human-caused warming of the global atmosphere and ocean,” and observable changes in the planet have made the scientific consensus about climate disruption clear as glaciers shrink, oceans and rivers warm, and coast lines recede.  A draft report by agencies such as NASA and the National Oceanic and Atmospheric Administration released late last year states that the world “has warmed by about 1.6 degrees Fahrenheit over the past 150 years and that human activity is the primary cause for that warming.”   It seems clear that rewards for innovation to combat climate disruption are worth the effort and worth the money if they produce progress in sustainable energy.  Despite such promise, however, DOE and community oversight groups should use caution in this new prize enterprise. 

Entrepreneurs have a played a dramatic role in historic energy discoveries of the past.  For example, the discovery and development of fossil fuel was driven by the private energy sector.  A recent example is the rocket launch by Elon Musk in February or 2018.  Likewise, DOE’s laboratories, university researchers and other energy researchers have a proven track record of progress in energy research.  Moreover, private investment seems posed to spur renewable energy technologies.  Venture capital investments needed to take ideas and turn them into marketplace reality seem likely to support private innovations, particularly when those innovations have the endorsement of the DOE. These factors suggest optimism about the result of this prize and others like it. 

So what’s the caution and why?  In an article forthcoming in the UMKC Law Review Green Economy Symposium later this spring, I survey current-day green economy sector jobs and other efforts to build markets to help encourage sustainable practices.  The article describes natural incentives to promote an all-hands-on-deck approach to addressing climate disruption and argues for the use of ex post rewards for innovations, like the award now offered by DOE.  Caution: it won’t work toward environmentally positive outcomes if, rather than creating incentives for real innovation, it is an excuse for a give-away. 

However, Concerns that ex ante rewards may confer unfair benefits to inventors turns a blind eye to the risks accompanying the failure to attract innovations to solve the global climate problem and other environmental problems.  Government support should encourage the progress that a modern-day Edison, Tesla or Jonas Salk might make with true break-through advances.  In such cases, governments should mobilize to support inventions even when the government did not foresee such developments.

The possibility that the reward program will advance new and robust solar energy manufacturing innovations makes it worth pursuing.  The risk, however, that the program will fail to advance the science of solar energy is real. It is again that some wasted funding is likely.  And distinguishing between an incentive for innovation and a reward for being part of the energy structure can be difficult.   For example, last year Secretary of Energy Rick Perry announced payments to nuclear and coal companies for their status as sources of power based on the rationale that such payments serve as insurance against a compromise of the energy grid in the future.  The plan did not include payments to renewable energy companies, however, causing some to speculate that the payments had a political purpose rather than the stated purpose of insuring an uninterrupted energy supply. 

The answer to whether the DOE program is worth pursuing hinges not on the ultimate result but on the good faith nature of the incentive and the effectiveness of the efforts of those monitoring the implementation of the reward.    The use of government incentives, including prizes, presents a potentially fertile avenue for progress.  While risks exist, the possibility of progress is alluring.  So long as the rewards serve to stimulate new ideas rather than simply rewarding existing players to continue business as usual, the expenditures are justifiable and, ultimately, justified because of the possibility of new.   Discovering innovation that moves the country toward a carbon-neutral economy is a goal worth funding – even when the success of such research is not assured.  In fact, this is the nature of research itself.  

Statutory Deadlines Matter—EPA Gets Taken to the Woodshed

Posted on February 14, 2018 by Seth Jaffe

Last week, EPA was ordered to take final action on a Clean Air Act § 126(b) petition filed by the State of Connecticut, which asserted that emissions from the Brunner Island Steam Electric Station in Pennsylvania contribute to nonattainment in Connecticut.  

EPA did not dispute liability; it had clearly missed the original statutory deadline. The case was all about the remedy. EPA asked to be given until December 31, 2018 to respond. Plaintiffs said EPA could respond within 60 days.

Noting the “heavy burden” EPA bears in trying to demonstrate that it cannot comply with the congressionally mandated timeline, the Court ordered a response within 60 days, concluding that:

Defendants’ proposed schedule contravenes the congressional intent that EPA “act quickly on a Section 126(b) petition.”

I noted last spring that we are likely to see more of these cases. And I think we’re also going to see increasing judicial impatience with agency delay. I also wonder if this case might be the first bit of evidence that Scott Pruitt’s order precluding the notorious—if mythical—practice of “sue and settle” may have come back to bite EPA.

EPA had to know it was going to lose this case. In bygone days—meaning 2016—EPA would have negotiated for the best schedule it could have gotten. If EPA had told the plaintiffs it would respond to the petition within 90 or even 120 days, my guess is that the plaintiffs would have accepted such a proposal. Given the Pruitt memorandum, that was not possible. The outcome? The worst possible result for EPA.

Just wonderin’.

(Full disclosure: Foley Hoag has represented Talen Energy, owner of Brunner Island, on matters unrelated to Brunner Island. We take no position on the merits of the underlying § 126(b) petition.)

Fast & Furious: 21 Superfund Sediment Sites Targeted for “Immediate, Intense Action”

Posted on February 13, 2018 by Mark W. Schneider

On December 8, 2017, U.S. Environmental Protection Agency Administrator Scott Pruitt designated 21 Superfund sites for “immediate, intense action”. It’s an open question whether this effort will be more successful than many of EPA’s previous failed efforts to comply with its policies for contaminated sediment sites.

EPA has not met many of its prior commitments regarding sediment sites. On July 25, 2017, EPA’s Superfund Task Force identified 42 recommendations intended to, among other things, “evaluate and expedite NPL sites to completion”, “encourage and facilitate responsible parties’ expeditious and thorough clean-up of sites”, “create oversight efficiencies for PRP lead cleanups”, and “promote redevelopment/reuse of sites by encouraging PRPs to invest in reuse outcomes”. Since that time, some stakeholders have sought action from EPA based on the principles set forth in Task Force recommendations. In response, some have received commitments from EPA headquarters to seriously consider the requests, but the promises made by Headquarters often have not been turned into constructive action consistent with the recommendations.

Last year, EPA’s Office of the Land and Emergency Management (OLEM) issued Directive 9200.1.130 (Jan. 9, 2017), which identified 11 recommendations “based on current best practices for characterizing sediment sites, evaluating remedial alternatives, and selecting and implementing appropriate response actions”. OLEM directed the regions to, among other things, “develop risk reduction expectations that are achievable by the remedial action”. Unfortunately, just two days earlier, EPA issued a Record of Decision for the Portland Harbor Superfund Site that, in direct conflict with the OLEM Directive, established cleanup goals that are unachievable.

And these are just EPA’s recent promises. In 2002, EPA identified 11 principles in its Principles for Managing Contaminated Sediment Risks at Hazardous Waste Sites (OSWER Directive 9285.6-08). EPA announced that, among the key principles, it was important to “control sources early”, “ensure that sediment cleanup levels are clearly tied to risk management goals”, and “design remedies to minimize short-term risks while achieving long-term protections”. Similar principles were articulated in EPA’s 2005 Contaminated Sediment Remediation Guidance for Hazardous Waste Sites (OSWER Directive 9355.0-85). Unfortunately, many of EPA’s decisions regarding sediment contamination sites have been made without consideration or application of these principles.

Will things be different for the 21 sites targeted by Administrator Pruitt for “immediate, intense action”? Unlike earlier pronouncements by the agency, which established program-wide recommendations to be implemented at all applicable sites, the list of actions for the 21 sites sometimes are specific and measurable, e.g., “initiate and complete negotiations to begin implementation of early actions” at the Anaconda Co. Smelter. It’s possible that, where the recommendations are specific and measurable, EPA will be able to take action to advance progress at a particular site. On the other hand, some of the actions proposed for other sites on the list are so general, e.g., “resolve issues expeditiously” at Allied Paper, Inc./Portage Creek/Kalamazoo River; “initiate actions to allow revitalization of the site” at Des Moines TCE (aka Dico Company, that it will be difficult to measure success.

Who Goes First? What Happens When Two Federal Mineral Lessees Clash Over The Same Acreage

Posted on February 7, 2018 by Tom Sansonetti

In January, the Wyoming Supreme Court declined to play umpire in a dispute between two federal mineral lessees. The decision merely defers an issue of first impression: what rules apply when competing mineral lessees occupy the same leasehold?

The Berenergy Corporation produces oil from several sites in Wyoming’s mineral rich northeast corner. Berenergy obtained its oil leases from the Department of the Interior’s Bureau of Land Management in the 1960s. Berenergy’s nine wells are spaced laterally on an east-west axis.

Peabody Powder River Mining extracts coal from several mines in the same area. Peabody also obtained its coal leases from the BLM, but in the 1970s. Peabody plans to mine the coal in a south to north direction for the next forty years.

Peabody’s mine is now within a mile of Berenergy’s wells. Peabody offered to pay Berenergy the fair market value of its wells. In response, Berenergy demanded a sizeable multiple of the appraisal value of the wells in order to get out of Peabody’s way. Not surprisingly, the parties could not reach an agreement and litigation ensued.

First, Berenergy sued Peabody in Wyoming state court claiming that its earlier-issued leases gave it priority on a “first in time is first in right” theory. Berenergy sought to require Peabody to mine around its wells if Peabody was unwilling to pay up.

Next, Peabody sued Berenergy in Wyoming federal court claiming that since both parties were federal mineral lessees with a common BLM lessor, the decision on priority should be made by a federal judge based on a doctrine of accommodation. Peabody argued that factors such as the number of jobs at stake, the amount of royalties paid to the government, the value of the respective minerals, and the ability to maximize production of both minerals should be used to decide if Peabody could mine through Berenergy’s wells or be made to mine around the wells. The latter decision would require Peabody to leave the bypassed coal in place forever as the mine proceeds in its northerly direction.

The Obama-era BLM declined to take a stance as to which lessee should prevail. Even though the BLM was a common lessor, the federal government declined to intervene or be impleaded as an indispensable party in either lawsuit.

In June 2014, the federal district judge remanded the case to the state district court for resolution under state law while dismissing the federal action for lack of federal question jurisdiction.

Following a weeklong bench trial, the state district judge, while acknowledging that the case was without precedent and one of first impression, issued an order in October 2016 rejecting Berenergy’s “first in time” argument and utilizing the doctrine of accommodation. The court’s ruling would allow Peabody to mine through if it paid Berenergy the full appraised value of its wells. Berenergy appealed the order to the Wyoming Supreme Court.

On January 4, 2018 the Wyoming Supreme Court vacated the state district judge’s order, declaring that there was no state law that applied to two federal mineral lessees in conflict with one another. Berenergy Corp. v. BTU Western Resources, Inc., 2018 WY 2, 408 P.3d 396 (Wyo. 2018).

The Court noted that the Berenergy wells had been valued at less than a million dollars while Peabody’s mining of the coal in question would create many jobs and generate tax revenues that dwarfed the revenues produced from Berenergy’s aged and nearly depleted wells.

But the Court stated that it was the BLM’s duty to resolve the conflicts between its two lessees.  Thus, the Court remanded the case to the state district court judge with instructions to dismiss the case unless the BLM agreed to be joined as a party.

By the end of 2018, the coal pit wall will contact the first of Berenergy’s oil wells. Peabody plans to pull the drilling pipe and store it for future use along with all of the associated oil field equipment. The well hole would be plugged as Peabody’s huge drag lines mine through the area.

No doubt temporary restraining orders will then abound. But where will they be filed? The federal district court has already decreed that the conflict is not a federal issue. As of January 4th, the Wyoming state district courts have been instructed to stay out of the conflict since state law does not apply.

So who does get to go first? Will the Trump-era BLM decide to get involved? And if so, under what rules? Stay tuned.

Troubled Waters – Blue Lakes Turning Green From Toxic Algal Blooms

Posted on February 6, 2018 by Virginia C. Robbins

Frank DeOrio knows a lot about protecting drinking water.  For more than 25 years, Frank was Director of Utilities for the City of Auburn located in the pristine Finger Lakes region of Upstate New York.  He was responsible for the water supply drawn from Owasco Lake and the protection of the lake’s watershed.  During Frank’s tenure, the City won awards for the best water in the state and the U.S. 

Frank and I recently discussed his concerns about the potential impacts to drinking water from summer algal blooms in our region’s lakes.   Algal blooms can occur when spring rains flush nutrients, for example, phosphorous, into waterbodies.  Summer temperatures raise water temperatures, creating optimum growth conditions.    

Owasco Lake, September 18, 2017

Owasco Lake, September 18, 2017

Summer algal blooms now occur in more lakes, their duration has increased, and they are producing toxins that pose health risks to the public when ingested or during recreational contact.  These toxins are not easily treated by water suppliers because the technology to treat one toxin may not be effective for another.  And unlike bacteria, boiling water does not remove these toxins. 

In 2017, harmful algal blooms (HAB) occurred in all 11 of the Finger Lakes, reportedly for the first time.  Blue-green algae are cyanobacteria and they can produce several species of cyanotoxins.  What is disturbing about the recent HAB outbreaks is that some classes of these cyanotoxins (e.g., microcystins), are particularly toxic.  If present at high concentrations, they can be difficult or impossible to treat using the technology of most public water systems.  One of these is Microcystin-LR, a liver toxin that is considered one of the more toxic.  These toxins can also cause skin, digestive system and other health issues.

Mycrocystin-LR has been identified in raw water drawn from Owasco Lake and Skaneateles Lake, both jewels of the Finger Lakes.  And Owasco Lake provides drinking water to more than 50,000 customers.  In 2016, the City of Auburn was using filtration to treat its raw water.  When the level of Mycrocystin-LR increased, the City considered moving the location of its water intake away from the area of the lake containing the toxin.  But would the new intake remain safe if the toxin shifted location?  The City decided against moving the intake and instead added carbon filtration. 

Skaneateles Lake is the primary water supply for the City of Syracuse and surrounding communities.  The water authority operates under a “filtration avoidance” authorization.  After a severe storm on July 1, 2017, phosphorous levels in the lake rose, resulting in algal blooms, and Microsystin-LR was then detected in the raw water pumped from the lake.  The levels were low enough that treatment was not required and the toxin was not identified in the water that reached customers.  Nonetheless, the presence of this toxin in the raw water is a disturbing development. 

These examples are lakes in my area.  But similar algae toxins and blooms are occurring in New England states, including New Hampshire and Maine. 

The broader challenges?  The science around algae toxins is emerging.  Further, there are no federal or state drinking water standards for microcystins (though there are health advisory guidelines published by USEPA and some states).  Water treatment plants are generally designed to avoid taste and odor concerns and to manage the most commonly tested algae toxins.  The next generation of plants will need to have more flexible designs to accommodate advanced treatment technologies.  And water authorities will need to consider spatial needs, hydraulics, connections, utilities and process control for these technologies. 

Frank’s concerned.  So am I.  It may get worse before it gets better.  While we wait for science, regulatory efforts and focused treatment technology to develop, at least municipalities can take steps to control the potential for toxic algal blooms by a combination of runoff control, nutrient reduction and stream-bank restoration.  Why wait to build that bridge from troubled waters to cleaner lakes?

With the Stroke of a Pen…or a Tweet?

Posted on February 1, 2018 by JB Ruhl

John Milner’s recent post on executive orders, memorandums, and proclamations taps into something that is quite new and different for environmental lawyers—a president who uses these and other “direct actions” to shape environmental policy from day one, and who is doing so largely by undoing his predecessor’s direct actions.  

I’ve recently completed two empirical studies of presidential direct actions from FDR through the first year of the Trump Administration. In one paper we look at what topics presidents have focused on overall through time and then drill down on environmental (and energy) policies. In the other paper we examine the practice of presidents revoking predecessor direct actions (through yet another direct action).

Despite what you may read in the media, President Trump is by no means unlike other presidents in using direct actions, and lots of them, to steer policy early in his term, or in revoking predecessor direct actions to get the job done. What sets him apart is how early in his term he focused on environmental and energy policy, and how aggressive he has been in revoking President Obama’s direct actions in those fields. And then there’s…the tweets. Let’s take these one at a time.

Direct Actions and the Environment: There is a rich history of presidents using the big four direct actions—executive orders, memorandums, proclamations, and determinations—to shape policy straight from the White House, but environmental policy has not played a big role. Once you take out public lands policy, including the Antiquities Act, environmental policy has been a small component of direct action activity. Energy policy has been more prominent, however, and to the extent the two fields are increasingly merging, one does see more presidential attention going their way, but not usually concentrated at the beginning of a term. President Trump is quite different in this respect, using direct actions to dramatically change environmental and energy policy right out of the gate. 

Revoking Direct Actions: Presidents have revoked predecessor direct actions throughout history, and with great frequency. Here President Trump is no different, except that he is the first to bear down so much on environmental and energy policy. Part of the reason, of course, is that President Obama used direct actions to shape much of his administration’s environmental and energy policy, meaning President Trump could not advance his policies without negating President Obama’s actions. But he has gone further than that. For example, while not completely unprecedented, his orders “shrinking” existing national monuments established by Presidents Clinton and Obama have, for the first time, called into question whether a president has the power to do so.  

Tweets as Direct Actions: The rising use by politicians of social media as a channel of communication has raised questions regarding the status of President Trump’s frequent “tweets” as official policy. If the pen is mightier than the sword, is a tweet from the President even mightier?

Until recently, no one could be blamed for thinking a tweet is just a tweet—but they warrant their own treatment (tweetment?) given how important a role they have come to play in the Trump Administration. For example, former White House Press Secretary Sean Spicer somewhat circularly explained the status of President Trump’s tweets, stating that “The President is the President of the United States, so they're considered official statements by the President of the United States.” CNNPolitics, White House: Trump’s Tweets are “Official Statements." Ninth Circuit Court of Appeals apparently took him at his word when ruling on the so-called “travel ban,” pointing to a Trump tweet as tantamount to an official presidential “assessment.” Hawaii v. Trump, No. 17-15589, n. 14 (9th Cir., June 12, 2017). Indeed, the Department of Justice recently declared in litigation that Trump’s tweets are “official statements of the President of the United States.” James Madison Project v. Dep’t of Justice.  It’s not entirely clear where we are supposed to go with that—are tweets truly direct actions, or just official statements, and what’s the difference?

Presidents through time have shaped policy through direct actions, revoked predecessor direct actions, and, more recently, tweeted. For environmental lawyers, though, President Trump has done all three in ways that seem to be changing the rules of the game. Stay tuned for more?  How can you not?

The Packers, Beer, Cheese Curds and …Regulatory Reform?

Posted on January 30, 2018 by Todd E. Palmer

If states are the crucible of policy experimentation, Wisconsin’s regulatory reform efforts deserve attention as the Trump Administration implements its federal deregulatory agenda.   Wisconsin has been pushing an aggressive deregulatory agenda for the last five years and its experiences might better inform the federal debate in this area.

The cornerstone of Wisconsin’s regulatory reform effort has been Act 21.  Enacted in 2011 during a Special Session of the Legislature, Act 21 prohibits a state agency from implementing or enforcing any requirement, standard or permit term unless it is explicitly required or authorized by statute or administrative rule. Although largely ignored for its first five years, Act 21 has become a significant force in the state.  A previous ACOEL blog post highlights a Wisconsin Attorney General opinion that interprets Act 21 as restricting the Wisconsin DNR’s authority to regulated high capacity wells.  That issue is working its way through state courts.  More recently, Act 21 has been the legal predicate for further limiting state agency regulation in other areas, including:

-          A decision issued by the Wisconsin DNR Secretary concluding that her department lacks explicit authority to impose a limit on the number of animals at large livestock operations or to require that monitoring wells be installed around such operations. The Secretary’s decision reversed an ALJ’s opinion to the contrary.

-          A State Attorney General opinion that animal unit limits in WPDES permits are unlawful because they are not explicitly authorized by a statute or rule.

-          A judicial settlement agreement executed by the State of Wisconsin agreeing to refrain from enforcing any standards applicable to feed storage leachate or runoff management unless promulgated as a rule.  The state further agreed to withdraw and not enforce draft program guidance that sought to impose such requirements. 

-          A State Attorney General opinion that state agencies cannot enforce rules that are not explicitly authorized by statute, even if those rules were promulgated before enactment of Act 21.

-          A State Attorney General opinion that state agencies do not possess “any” inherent or implied authority to promulgate rules or enforce standards, requirements or thresholds.  The general statements of legislative intent, purpose or policy that are often found in statutory provisions do not confer or augment agency rulemaking authority.  

In the wake of these developments, the State Attorney General recently observed that “Act 21 completely and fundamentally altered the balance [of government administrative power], moving discretion away from agencies and to the Legislature.” 

As Act 21 forces Wisconsin agencies to create rules to implement their regulatory programs, the State Legislature is turning its attention to the rulemaking process. The Legislature passed its own version of the Reins Act (Regulatory Executives in Need of Scrutiny) which, in the most general of terms, increases the procedural requirements and legislative oversight of the state’s rulemaking process.  It now takes roughly three years to pass an administrative rule in Wisconsin.   

Having added procedures that delay the rulemaking process, the Legislature is debating bills that would expedite the rule repeal process. These bills would establish an expedited process requiring agencies to inventory and petition the Legislature for repeal of certain rules. For example, one bill would require the repeal of state rules concerning air pollutants that are not regulated under the federal Clean Air Act.  Another bill would automatically repeal certain environmental regulations ten years after they take effect. Although the Wisconsin DNR could attempt to readopt an expiring rule, that effort could not commence any sooner than one year before a rule’s expiration. 

In the Judicial Branch, the Wisconsin Supreme Court will soon decide whether the state’s practice of deferring to agency interpretations of statutes comports with the Wisconsin Constitution.  Recent decisions suggest that the majority of Justices will answer in the negative.  A decision should be issued this summer and could impose additional restrictions on agency authority.  

Not surprisingly these reforms have been controversial.  ENGOs have filed lawsuits challenging permits that fail to include terms and conditions due to the restrictions of Act 21.   The regulated community has taken the opposite view, challenging permit terms and conditions that are not explicitly authorized by rule or statute.  At some point these roles are likely to reverse since the regulated community often relies upon implicit agency authority to establish permit conditions which it finds favorable. 

Much like the federal initiative, Wisconsin’s reforms have been wrapped in the trope of reducing the regulatory burdens placed on state businesses and thereby improve the state economy. So far the state’s economy is doing quite well.  These efforts warrant continued monitoring to gauge how the economy and environmental concerns have been balanced while implementing these reforms.   

Musings on Starting a New Superfund Case – Hope springs eternal?

Posted on January 25, 2018 by David Rosenblatt

As lawyers, many of us enjoy the “rush” of starting a new case.  A new matter can be a welcome fresh tablet, providing us with the opportunity to use our skills and experience in creative and interesting ways to further our client’s interests.

But -- for those of us who have fought for clients on the front lines of EPA’s Superfund program over the years -- maybe not so much.  As Superfund practioners, we must deal with a cumbersome, almost 40-year-old law and an agency whose approach is dictated by a raft of standard operating procedures within an entrenched bureaucracy, decades-old guidance documents and forms, and a seemingly endless review and comment process.

To add to the challenge, clients have changed over the past 40 years, even if the Superfund law and its implementation have not. Today’s clients demand quicker, more practical, and cost-effective solutions in resolving their legal problems, without years of negotiations and endless administrative boxes to check off along the way in assessing and cleaning up sites.

There are other paradigms.  Many states have operated as laboratories of innovation in site cleanup through privatization and reduction of bureaucratic obstacles. In July 2017, EPA issued a Superfund Task Force report recommending numerous reforms to streamline the Superfund process and expedite cleanup.

Yet despite these advances on the state level -- and a supposedly business-friendly administration now in Washington and at EPA -- Superfund, well, remains Superfund. 

So here I embark on yet another Superfund Special Notice negotiation in early 2018.  I am armed with fresh ideas to bring to the table and an EPA Task Force report in my pocket, just hoping I will discover that a few of these new approaches will somehow have resonance with my EPA counterparts and that Superfund 2018 is somehow different from Superfund 1998.

Anyone want to take any bets on what I will find?    

One Brief Shining Moment of WOTUS Clarity

Posted on January 24, 2018 by Rick Glick

In a rare moment of clarity in the benighted history of the Waters of the United States or WOTUS rule, a unanimous Supreme Court declared that jurisdiction to review the WOTUS rule lies in the District Courts and not the Courts of Appeal.  The immediate effect of the January 22 ruling in National Assn. of Manufacturers v. Dept. of Defense  is to lift the nationwide stay of the rule imposed by the Sixth Circuit—which held that the appellate courts have original jurisdiction over the rule—thus reigniting a lot of dormant trial court challenges. 

The Clean Water Act applies to “navigable” waters, which is defined simply as “waters of the United States, including the territorial seas.”  EPA and the Army Corps of Engineers administer the CWA, and have tried without much success to refine this vague definition.  The latest attempt is the WOTUS rule, adopted by the Obama EPA in 2015.  The issue in National Assn. of Manufacturers is not whether that attempt hits the mark, but in which court should challenges be heard.

As noted in Bob Brubaker’s take on this case, the Court looked to the plain language of the statute, and to context when further explanation is needed.   The CWA extends original jurisdiction to the Circuits for EPA “approving or promulgating any effluent limitation or other limitation.”  The government argued that the WOTUS rule falls within “any . . . other limitation.”  The Supreme Court rejected that argument, holding that such other limitations must be related to effluent limitations, and the WOTUS rule just establishes a definition that would apply generally to the scope of CWA.  The Court also rejected applicability of another CWA basis for Circuit Court jurisdiction advanced by the government, “issuing or denying any [NPDES] permit,” concluding simply that the WOTUS rule is not the same as permit issuance.

So what difference does it make if a trial judge or an appellate judge makes the initial decision on WOTUS?  WOTUS has drawn a multitude of challenges in both the District Courts and Courts of Appeals, including some in which plaintiffs filed in both courts to be on the safe side.  The case will end up at the Supreme Court anyway, right? 

True, but consider that the Sixth Circuit consolidated all the challenges in other Circuits and issued a decision that applied across the country.  The district court litigation has not been consolidated, and some cases have come to different conclusions, with many remaining to be litigated.  So, we can expect years of litigation in many different courts, followed by years of appeals heard by the Circuits, and finally to the Supreme Court . . . again.

But wait, Scott Pruitt’s EPA has initiated a rulemaking process to rescind and replace the WOTUS rule, so wouldn’t that moot the pending challenges to the rule?  It would not.  EPA has announced it is delaying the effective date of the 2015 rule for two more years to allow the Agency to develop its replacement.  But, in the meantime, the 2015 WOTUS rule remains in place.

The practical result is that the current round of cases in the District Courts will continue, followed -- if not accompanied -- by a new round of litigation challenging the proposed change of effective date, and the proposed rescission and replacement rules.  Safe to say there will be no certainty on the definition of WOTUS and the scope of Clean Water Act jurisdiction for many years to come.

Justice Sotomayor’s Two Greatest Commandments of Statutory Interpretation

Posted on January 23, 2018 by Robert Brubaker

I expect to see many brilliant ACOEL blog posts (from members that unlike me are Clean Water Act oracles) on the Supreme Court’s decision in National Association of Manufacturers v. Department of Defense et al., No.16-299 (January 22, 2018).  That decision holds that the district courts rather the circuit courts have initial jurisdiction to review EPA’s action in promulgating the Waters of the United States (WOTUS) rule.  I write to comment briefly on one aspect of the opinion: what it teaches us about statutory interpretation.

The field of environmental law is comprised of an exceptionally abundant amount of statutory law (in contrast to, say, antitrust law at the other extreme).  Environmental practitioners are continuously confronted with issues of statutory interpretation, often of incredible difficulty.  What jumps out at me from the unanimous WOTUS opinion, authored by Justice Sotomayor, is the clarity of articulation of the two greatest commandments of statutory interpretation.  The first commandment is that the statute’s plain language is of paramount importance to the correct interpretation, transcending all other considerations.  The second commandment is that context and structure are the most important guides to the correct interpretation when the statutory text is insufficiently clear.  We are well-advised to not overlook or overcomplicate the two most basic rules of statutory construction.

Another thing jumps out at me from Justice Sotomayor’s opinion for a unanimous Court.  To my knowledge, it is the first federal appellate court decision since 1984 involving an EPA interpretation of its enabling legislation, in a notice and comment rulemaking, that does not cite Chevron v. NRDC.

Even the irrationality of a bifurcated judicial review scheme, and the compelling interests in quick and orderly resolution of rulemaking disputes, in judicial efficiency, in avoiding conflicting outcomes in district court cases brought as late as six years after the claim accrues – all ably argued by EPA – were not enough to overcome the two greatest commandments of statutory interpretation.

WHEN SCOTT MET JANUS

Posted on January 16, 2018 by Robert M Olian

The amateur horologists among you will recall that all of the calendar months are named after fabric fresheners (February - Febreze), gods (March - Mars, April - Aphrodite, May - Maia, June - Juno), emperors (July - Julius, August - Augustus), or simply their place in the calendar - Sept, Oct., Nov. and Dec. for the seventh, eighth, ninth, and tenth…. Whoa, wait a sec!  (I could explain, but instead that issue is left as an exercise for the reader).

We are interested in January, named for the god of beginnings, Janus, who is always depicted as facing in two directions.  Could one write a blog post about the current state of environmental law based on the theme of a two-faced ruler who thinks he’s one of the gods?

OF COURSE one could! But that would be too easy. Instead, how about a blog post to make everyone happy, while the festive warmth of the holidays is still washing over us? Using the game of MadLibs as our inspiration, first complete the following phrase by choosing either Answer A or Answer B.

“I {insert answer} vote for Donald Trump in the 2016 Presidential election.”

A. did not

B. did

If you picked answer A, read the following blog post using the phrases from option A. If you picked answer B, read the post using the phrases from option B. Make sure you use the correct option, or you will be an unhappy reader instead of a happy reader, and we don’t want that.

*******************

The environmental trade press is replete with top ten lists at this time of year —top ten judicial rulings, top ten regulatory decisions, etc. — but the goal here is to step back and look at things from the 50,000-foot level. Here’s the shorter meta list:

1.  EPA Administrator Scott Pruitt installed a Sensitive Compartmented Information Facility (SCIF) costing nearly $25,000 in his personal office (EPA already had another secure room in the headquarters building) and is the only EPA Administrator to ever request a 24/7 security detail. The 18-member security detail cost taxpayers more than $830,000 in Pruitt’s first three months at the helm and required that EPA agents be pulled away from ongoing criminal investigations to staff the security detail. These actions suggest that EPA is being run by someone who is

1A. self-aggrandizing to the point

1B. appropriately conscious

of

2A. paranoia.

2B. security risks that are increasingly important at a time where environmental issues intersect those of national security.

2. “More than 700 people have left the Environmental Protection Agency since President Trump took office, a wave of departures that puts the administration nearly a quarter of the way toward its goal of shrinking the agency to levels last seen during the Reagan administration,” (NYT, 12/22/17), including a disproportionate number of scientists. The brain drain is intentional according to:

1A. Obama science adviser Thomas Burke

1B. Trump OMB Director Mick Mulvaney

who added,

2A. “The mission of the agency is the protection of public health. Clearly there’s been a departure in the mission.”

2B. “You can’t drain the swamp and leave all the people in it. So, I guess the first place that comes to mind will be the Environmental Protection Agency.”

3. The United States withdrew from the Paris climate accords, a move that was

1A. denounced

2A. praised

by many, ranging from:

2A. the Pope to the head of Goldman Sachs.

2B. Charles Koch to David Koch.

4. The United States was battered by record flooding, hurricanes and forest fires, all of which were

1A. substantial evidence suggesting the existence of

1B. a bizarre coincidence.

2A. anthropogenic climate change.

2B. [Sorry, there is no phrase to describe something whose existence is denied]


But wait, you say, that’s only four items, not a top ten. Sorry, but there are eight; you only read four. If one of you As will add another to the comments, and one of you Bs will do likewise, that will get the total to 10.

A VISIT TO THE DUTCH ROYAL PALACE TO HONOR GLOBAL ENVIRONMENTAL INNOVATORS

Posted on January 10, 2018 by Robert Percival

The initial email, quickly skimmed, had hallmarks of spam – words like “royal palace” and “100,000 Euros”.  But the attached letter of invitation contained wonderful news.  The Dutch royal family’s Prince Claus Fund had selected Chinese environmentalist Ma Jun to receive its top award. They wanted me to prepare a tribute to him for inclusion in the official awards book and to be their guest at the presentation at the Royal Palace in Amsterdam.

I first met Ma Jun after I gave a talk in Beijing in 2009.  Astonishingly, he asked me to autograph the fourth edition of my casebook Environmental Regulation: Law, Science & Policy. When I asked why, he declared that “page 438 changed my life.”  That was the portion of the book where material on the U.S.’s Emergency Planning and Community Right-to-Know Act (EPCRA) began. Ma Jun was so impressed by the EPCRA’s Toxics Release Inventory that he vowed to create a website providing the Chinese public with similar information.  But he did not stop there.  He created apps that enabled the public to use their cellphones to access real time information on air and water quality in more than one hundred Chinese cities. 

In a country that at the time lacked express legal authorization for citizen suits, Ma Jun grasped the power of information to mobilize public demand for environmental protection.  He founded an NGO called the Institute for Environmental and Public Affairs (IPE) that quickly became a major force in China’s environmental movement.  Working with a coalition of NGOs, Ma Jun launched audits of the Chinese supply chains of major multinational electronics companies to assess their compliance with environmental and labor laws.  The results of these audits helped convince Apple to agree to regular, independent audits of it Chinese suppliers, the results of which now are presented annually in the company’s Supplier Responsibility Reports.

Another brilliant project that Ma Jun pursued jointly with NRDC’S Beijing Office was to publish annual ratings of China’s 120 largest cities reflecting how well local governments comply with requests for environmental information under China’s Open Information Law. This Pollution Information Transparency Index (PITI) has become a powerful tool for encouraging compliance with the law.  IPE and NRDC frequently hear from local officials in China who want to improve their ratings, much as U.S. universities scramble to increase their annual standings in the U.S. News rankings.

The Prince Claus Fund, named for the late husband of former Queen Beatrix, is funded in part through the Dutch Ministry of Foreign Affairs. It also made awards to other social and cultural innovators. These included Brazilian filmmaker Vincent Carelli, a champion of indigenous tribes, scientist Brigitte Baptiste, who is working to protect post-conflict areas in Colombia, Burkino Faso architect Diébédo Francis Kéré, who designs green buildings for African villages, Khadija Al-Salami, who champions women’s rights in Yemen, and Indian artist Amar Kanwar. It was inspiring to get to meet these heroes during the ceremony at the Royal Palace and to learn more about their work helping to build a better world in all corners of the planet. 

Chronic Pesticide Exemptions May Increase Risks to Our Pollinators

Posted on January 8, 2018 by Stephanie Parent

EPA has the responsibility to protect the public and the environment, including bees and other pollinators, from the use of pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Before any pesticide can be sold or distributed in the United States, EPA must register it after determining that its use will not generally cause “unreasonable adverse effects on the environment.” Section 18 of FIFRA allows use of pesticides that have not met this standard if “emergency conditions exist.” Congress intended use of Section 18 emergency exemptions to address urgent pest conditions such as severe and unexpected insect outbreaks. Yet, in some cases, EPA seems to administer the emergency exemption program so that it functions as a shortcut, allowing pesticide use to bypass the registration standard.

EPA’s repeated “emergency” exemptions for use of the insecticide sulfoxaflor on cotton and sorghum over the last six years are a good example of this. Sulfoxaflor is an insecticide, which EPA acknowledges is very highly toxic to bees. In 2015, the Ninth Circuit vacated EPA’s decision to register sulfoxaflor because “[w]ithout sufficient data, the EPA has no real idea whether sulfoxaflor will cause unreasonable adverse effects on bees, as prohibited by FIFRA.” In 2016, EPA registered sulfoxaflor without additional bee data or studies. Instead, EPA explained that the new registration results in “essentially no exposure to bees” because this time it did not allow use on indeterminate blooming crops, such as cotton, or on crops grown for seed. And, the registration restricted applications on certain “bee attractive” crops to post-bloom only.

Despite these restrictions in the registration designed to avoid harm to bees, EPA has exempted the use of sulfoxaflor over 70 times from 2011 through 2017. All but one of these exemptions was for use on cotton, which was retracted from the registration application following the Ninth Circuit’s decision, or on sorghum, which was never included in the registration in the first instance. Most recently, EPA exempted the use on alfalfa grown for seed, even though the registration also prohibits such use to avoid adverse effects to bees. The Center for Biological Diversity, where I work, makes the case that EPA’s chronic approvals of Section 18 exemptions for use of sulfoxaflor no longer reflect “emergency conditions” and are circumventing the FIFRA’s registration standard. We may learn more about sulfoxaflor and other exempted pesticide uses when EPA’s Office of Inspector General concludes its evaluation of whether EPA’s emergency exemption process maintains environmental and human health safeguards. 

Environmental and Energy Executive Orders – Ever Expanding Exercise?

Posted on December 26, 2017 by John Milner

The presidential use of executive orders (EOs) is not a new practice but President Trump is using EOs to impact significant environmental and energy issues.  He is reported to be issuing EOs at the second-fastest rate of any modern Republican president, second only to President Eisenhower. This trend exists despite consistent criticism prior to being elected of President Obama’s EOs: “Obama … goes around signing all these executive orders.  It’s a disaster.  You can’t do it.”

What is an EO?  Here is a quick summary.  An EO is a directive issued by the president to federal governmental agencies.  The president may revoke, modify, or supersede any prior EO.  Presidents often undo the EOs of their predecessors, as President Trump has done a number of times with regard to EOs issued by President Obama.  Courts can declare an EO to be illegal or unconstitutional.  Congress can pass legislation overturning an EO, subject to the president’s veto authority.

In the environmental and energy areas, President Trump has issued the following EOs:

1.       “Expediting Environmental Reviews and Approvals for High-Priority Infrastructure Projects,” EO No. 13766, dated January 24, 2017.

The EO directs the chairman of the Council on Environmental Quality (CEQ), within 30 days after a request, to determine a project’s environmental impact and decide whether it is “high priority.”

2.      “Reducing Regulation and Controlling Regulatory Costs,” EO No. 13771, dated January 30, 2017.

The EO states that executive departments and agencies must slash two regulations for every one new regulation proposed. Regulation spending cannot exceed $0 and any costs associated with regulations must be offset with eliminations. The EO also directs the head of each agency to keep records of the cost savings, to be sent to the president.

3.      “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the U.S.’ [WOTUS] Rule,” EO No. 13778, dated Feb. 28, 2017.

The EO calls on federal agencies to revise a regulation put in place by President Obama called the Clean Water Rule or WOTUS. Published in 2015, WOTUS arguably expanded the number of bodies of water protected by the federal government to include certain streams, ponds, and smaller waterways that were not previously clearly covered.  The EO directs the administrator of EPA and the assistant secretary of the Army for Civil Works to review WOTUS and propose a new one that either eliminates or revises the rule.

4.      “Promoting Energy Independence and Economic Growth,” EO No. 13783, dated March 28, 2017

The EO directs EPA to review the Clean Power Plan (CPP) EO, signed by President Obama in 2014. In 2016, the Supreme Court granted a stay pending review in the U.S. Circuit Court for the District of Columbia of the CPP, which aimed to reduce carbon pollution from power plants.  This EO also requires federal agencies to review any regulations that could “potentially burden the development or use” of oil, natural gas, coal, and nuclear energy resources. Within 180 days, the agencies must submit reports to the Office of Management and Budget, which will take action to eliminate burdensome regulations.

5.      “Implementing an America-First Offshore Energy Strategy” EO No. 13795, dated April 28, 2017

The EO reverses a prior ban on Arctic leasing put in place under the Obama administration and directs the Interior Secretary to review areas available for off-shore oil and gas exploration.

6.      “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure,” EO No. 13817, dated August 15, 2017

The EO establishes “One Federal Decision” for major infrastructure projects, assigning each project a lead federal agency and creating a performance accountability system to track its progress.  It sets a goal of two years for the average completion time of the permitting process.  The EO also revokes Executive Order 13690, which mandated stricter environmental review standards in floodplains as part of President Obama’s Climate Action Plan.  That prior EO required planners to use flooding predictions that incorporated climate science.

The president may also issue proclamations, as well as presidential memoranda.  Like EOs, presidential proclamations and memoranda can have significant impacts.  For example, on December 4, 2018, President Trump issued a proclamation to substantially reduce the size of the Bears Ears and Grand Staircase-Escalante National Monuments in Utah.  Additionally, the EPA administrator may issue directives to the agency staff that have important ramifications, such as Administrator Scott Pruitt’s October 16, 2017 directive to end so-called “sue and settle” judicial settlements relating to EPA regulations.

It appears that EOs and their related executive edicts have become the standard operating procedure for presidents and their appointees.  The pressure to have “instant impact” is due, in part, to the political division in Congress and the impatience and uncertainty of legislative action.  As always, “the buck stops” with the courts to deal with the issues created by these executive actions.  As we all know, judicial action can bog down resolution of these issues almost indefinitely.  There is no easy way out of this quagmire.

Kozinski Resignation Complicates Mandamus Ruling in Kids Climate Lawsuit

Posted on December 22, 2017 by Patrick A. Parenteau

In a stunning development, Judge Alex Kozinski announced on Monday December 18 that he was resigning effectively immediately from the Ninth Circuit after multiple former clerks and junior staffers came forward with allegations of sexual misconduct against him.

Kozinsky was a member of a three judge panel that had just heard arguments on December 11 in United States v US District Court for the District of Oregon   in which the Trump administration is seeking a writ of mandamus to bar the climate lawsuit filed by 21 youth plaintiffs in Juliana v United States  which is scheduled for trial in February before the federal district court in Oregon.

By way of background, in November 2016, the district court denied motions to dismiss the action, allowing federal public trust and Fifth Amendment due process claims to proceed. After unsuccessfully seeking permission for interlocutory appeal, the United States filed the petition for writ of mandamus under the All Writs Act, arguing that the district court committed clear error in denying the motions to dismiss. The government also argued that the discovery process would be unduly burdensome and would distract senior administration officials like Scott Pruitt and Rick Perry from the more important work of dismantling the regulatory programs adopted by the Obama administration and increasing the nation’s reliance on fossil fuels.

Kozinski, as is his wont, was the most aggressive questioner at oral argument peppering plaintiffs’ counsel with questions regarding standing and justiciability and making it pretty clear how he was going to come down. By contrast, the other members of the panel, Chief Judge Sidney Thomas and Marsha Berzon, focused on the narrower question whether mandamus was the proper remedy at this stage of the case. Both noted that the court had never granted mandamus where there was no conflict over discovery orders. Both noted that the case had become much more manageable with the departure of the industry interveners who had been the major target of discovery requests. Both noted that District Judge Aiken and Magistrate Coffin had narrowed discovery and had pledged to exercise a “firm hand” on the pretrial proceedings. Though each judge expressed reservations about various aspects of the plaintiffs’ claims and standing neither thought those were appropriate grounds for mandamus. Commenting on the unprecedented nature of what the government was seeking Judge Thomas observed: "We would be absolutely flooded with appeals from people who think their case should be dismissed by the district court."  

Kozinski’s resignation throws a bit of a monkey wrench into the proceedings. Judge Thomas must decide whether to replace Kozinski on the panel and schedule a new oral argument or proceed to decide the mandamus issue. If he and Judge Berzon are in agreement that the writ should be denied the simplest solution would be to issue a decision to that effect.

There is precedent for this. In Connecticut v AEP a three judge panel of the Second Circuit heard arguments in a case involving a public nuisance action brought by a number of states against utilities operating coal fired power plants. While the case was pending one member of the panel, Judge Sonia Sotomayor, was nominated to the Supreme Court and had to recuse herself.  The remaining members of the panel proceeded to decide the case in the states’ favor and Judge Peter Hall wrote an exhaustive opinion on standing and political question in the context of climate litigation. Though the Supreme Court ultimately reversed on other grounds the jurisdictional holdings were affirmed by a divided vote. 

The upshot is that there is a good chance we will see the “trial of the century” unfolding sometime next year.  Mr Pruitt may get a chance to try out his “red team, blue team” climate science debate in a real courtroom.

The North Slope Is Really, Really, Getting Warmer. Drill, Baby, Drill

Posted on December 20, 2017 by Seth Jaffe

The Washington Post reported last week that Utqiagvik, Alaska (formerly known as Barrow), has gotten so warm, so fast, that NOAA’s computers can’t even believe it.  The data for Utqiagvik (that’s hard to type!) were so high that the computers determined it must be anomalous and pulled all of the data from Utqiagvik from the NOAA monthly climate report.  Only when scientists realized that Utqiagvik was completely missing from the report did they notice what had happened.

How hot does it have to get to get bounced by the computer?  How about average October temperatures 7.8 degrees warmer than in 2000?  Average November temperatures 6.9 degrees warmer than in 2000?  Likely culprit?  Melting sea ice means that less sunlight is reflected.  That’s one nasty negative feedback loop.

In the meantime, as I noted in October, Alaska Governor Bill Walker has concluded that Alaska needs more oil drilling (can you say “Open ANWR” three times fast?) in order to pay for climate change mitigation.  It’s apparent that Governor Walker has not read Faust.

Governor Walker, this one’s for you.

READY FOR AN ENVIRONMENTAL BILL OF RIGHTS?

Posted on December 19, 2017 by John A. McKinney Jr

As this is written, a New Jersey legislator plans to introduce a bill that could lead to the amendment of the state constitution.  This amendment is being referred to the “Bill of Environmental Rights.”  Here’s the proposed language:

(a) Every person has a right to a clean and healthy environment, including pure water, clean air and ecologically healthy habitats, and to the preservation of the natural, scenic, historic, and esthetic qualities of the environment. The State shall not infringe upon these rights, by action or inaction. (b) The State’s public natural resources, among them its waters, air, flora, fauna, climate, and public lands, are the common property of all the people, including both present and future generations. The State shall serve as trustee of these resources, and shall conserve and maintain them for the benefit of all people. (c) This paragraph and the rights stated herein are (1) self-executing, and (2) shall be in addition to any rights conferred by the public trust doctrine or common law.

Unlike a law which requires compliance, this amendment will be used to obtain the “pure water, clean air and ecologically healthy habitats” guaranteed as a constitutional right, no different than the rights of free speech and freedom of religion.  Because it is not clear what a “right to a clean and healthy environment” actually means, state courts will have to decide the breadth and scope of such rights and the how they are protected. 

New Jersey courts can handle it.  They have dealt with similar broad language in the constitution which requires the legislature to provide “a thorough and efficient system of free public schools.”  That phrase has been fought over, in the courts and in the legislature, since the 1970’s.  It is still a hot button issue.

Will the New Jersey constitution ultimately include a Bill of Environmental Rights?  I am not sure but if it does, it will continue the state’s reputation as a great place to be an environmental lawyer.

Are RCRA Endangerment Claims Becoming The Preferred Way for Third-Parties To Regulate Point Source Discharges?

Posted on December 18, 2017 by Edward F. McTiernan

In 1972, Congress adopted the Clean Water Act (CWA) prohibiting discharges of pollutants from point sources without a permit.  Four years later, when Congress enacted the Resource Conservation and Recovery Act (RCRA), it included two notable provisions.  First, Congress excluded from the definition of “solid waste”—and thereby from regulation under RCRA—“industrial discharges which are point sources subject to permits under” CWA Section 402 (i.e., NPDES permits).  Second, Congress barred RCRA from applying to “any activity or substance which is subject to” various environmental statutes (including the CWA), “except to the extent that such application (or regulation) is not inconsistent with the requirements of such” other environmental statutes.  The net effect of these two RCRA “anti-duplication” provisions prevents RCRA from encroaching upon activities regulated by the CWA.  While much of this year’s Clean Water Act action seemed to focus on the WOTUS rule, 2017 may ultimately be remembered as the year in which plaintiffs were able to break through RCRA’s anti-duplication provisions and use endangerment claims to regulate point source discharges.

In Tennessee Riverkeeper, Inc. v. 3M Co., plaintiffs convinced a district court that they were entitled to pursue RCRA endangerment claims to regulate discharges of perfluorinated chemicals.  The court  refused to dismiss the case because, in its view, the defendants had failed to provide ‘‘any authority stating that a citizen cannot bring an RCRA claim to try to impose stricter limits on the disposal of hazardous waste than those imposed by an EPA-approved State permit or to supplement the terms of such a permit.”  Slip Op. at 20.  On November 2, the Ninth Circuit reached a similar result.  Ecological Rights Foundation v. Pacific Gas & Electric Company, (“ERF”).  Following an extensive (and largely unnecessary) analysis of RCRA’s non-duplication provisions, the Ninth Circuit stated: “RCRA’s anti-duplication provision does not bar RCRA’s application unless the specific application would conflict with identifiable legal requirements promulgated under the CWA or another listed statute.” Slip op. at 25.  In other words, plaintiffs may use RCRA to impose discharge limits on any substance not specifically named in a Clean Water Act permit, and perhaps to lower the discharge limits of substances that are.

By encouraging exactly the sort of dual regulation of a single discharge under both the CWA and RCRA that the RCRA non-duplication provisions appear intended to prevent, these decisions appear to be inconsistent with a proper reading of RCRA’s non-duplication provisions.  They may allow a judge to set discharge limits, displacing the limits (or the lack thereof) established by agency scientists following a public process.  This is problematic for several reasons.  A CWA permitted discharge may contain tens or hundreds of pollutants, but the permit typically regulates only those of most concern.  According to the Ninth Circuit,  however, the rest can now be regulated by RCRA.  Indeed, these recent decisions may open the door to using RCRA to cover pollutants  already regulated under the permit, as long RCRA imposes “stricter limits” (in the words of the Tennessee Riverkeeper court) than the CWA permit.  If the sole criterion is that RCRA endangerment claims must impose “stricter limits” than the CWA permit, plaintiffs may now have a legal basis for rewriting permits to contain whatever regulatory standards, technology requirements or procedural measures they can convince a court to impose.

ACOEL’s Alex Dunn to Serve as Regional Administrator for EPA Region 1

Posted on December 13, 2017 by Andrea Field

Last month, EPA Administrator Scott Pruitt announced the well-deserved appointment of the ACOEL’s own Alexandra Dapolito Dunn as Regional Administrator for EPA Region 1.  The press release accompanying the announcement described Alex’s exceptional qualifications and extensive environmental experience.  It also included endorsements and accolades for Alex from a remarkably diverse group of people, including senior regulators in the Region 1 states, representatives from environmental advocacy groups, and academics.

Those of us in the College both congratulate Alex and thank her for helping to raise the profile of the American College of Environmental Lawyers by somehow ensuring (we don’t know how and we don’t care) that Administrator Pruitt’s press release included numerous references to the College.  The announcement not only noted Alex’s membership in the ACOEL (and her recent election to the College’s Board of Regents), but also it included the endorsement of Alex by John Cruden and noted John’s current position as ACOEL president.

So, best of luck, Alex, and thanks for your efforts to help us achieve John Cruden’s goal of spreading the word on the ACOEL!  

Oh, Well, Some Folks Don’t Like Oysters, Anyway….

Posted on December 12, 2017 by James I. Palmer, Jr.

As a kid growing up in the hills of North Mississippi, I was introduced to oysters by my maternal Grandmother in Biloxi, down on our Coast.  I wasn’t particularly impressed with the slimy mollusks then, but my tastes changed over many years and I now enjoy them, especially in po’boys and on the half shell.

For the longest, I have considered oysters from Apalachicola Bay, Florida, to be the best along the Gulf Coast.  Large, plump, salty, everything an oyster fan likes.  But, today the oyster industry in the Bay has declined dramatically, and many Floridians believe that the ultimate fate of this historic mainstay of the economy of the area will soon be determined by the Justices of the United States Supreme Court.

The “Tri-State Water Wars” among Alabama, Georgia, and Florida are now several decades long, and never more intense.  Two interstate compacts, covering six river basins in the three states, failed to yield an “equitable apportionment” of the flows from these basins, and expired by their terms.  Follow-on negotiations fared no better.  So, in 2013 Florida sued Georgia in the Original Jurisdiction of the Supreme Court, but didn’t join Alabama.  The case was tried before the Special Master from October 31, 2016 through December 1, 2016.

At the core of Florida’s claims is the ever-growing demand for water in Georgia, principally (but not only) in metropolitan Atlanta.  Even the definition of “metropolitan Atlanta” differs among websites, so the data showing the population trends over the last 50 years also differs somewhat, but the numbers I will use for general reference show that the population of metropolitan Atlanta was 3,317,000 in 1990, 4,548,000 in 2000, 5,034,000 in 2004, and the 2010 U.S. Census recorded 5,800,000.  I’ve seen one projection of 8,000,000 by 2020.  Using these statistics purely for the sake of argument, the population of metropolitan Atlanta in 2020 – just over two years away – could have grown by over 240% in 30 years.  

Too, production agriculture in southwestern Georgia, heavily dependent upon surface water and groundwater supplies for irrigation, has also burgeoned during this same time period.  Groundwater levels in the Flint River basin have declined significantly because of what one of Georgia’s own witnesses at trial attributed to essentially lax regulatory management at the State level.  No surprise, these declines in groundwater availability have ratcheted up pressures on surface water resources in the Flint River watershed.

Thus, given these twin realities of seemingly insatiable urban and agricultural demands for water in Georgia, it’s no wonder that folks down in the Apalachicola Bay area staunchly believe that this is the principal cause of declining freshwater flows into the Bay, and, inevitably, will lead to the irrecoverable loss of the Bay ecosystem, itself.

The Special Master rendered his Report on February 14, 2017, and it was filed on March 20, 2017.  The Special Master found, as a matter of fact and law, that Florida had failed to prove its case by clear and convincing evidence, and recommended that the Supreme Court deny Florida’s claims.

Florida filed its Exceptions to the Report of the Special Master on May 31, 2017.  Georgia filed its Reply opposing Florida’s objections on July 31, 2017, and Florida filed its Sur-reply on August 30, 2017.  Amicus briefs supporting Georgia’s position have been filed by the United States (on behalf of the Corps of Engineers), the State of Colorado, and the Atlanta Regional Commission, et al.  The case has been set for oral argument before the Supreme Court on Monday, January 8, 2018.

Of the several issues before the Court, the two major ones are the “clear and convincing evidence”  burden of proof standard the Special Master imposed upon Florida and the general issue of “redressability,” which turns on the obligation of Florida to prove both substantial (some would say “irreparable”) injury and that the relief sought (a consumption cap on Georgia water use, primarily in the Flint River Basin) would, in fact, provide additional flows into Apalachicola Bay sufficient to save the ecosystem and the oyster industry.  Understandably, Georgia strongly rejects Florida’s contentions.

The cases relied upon by Georgia and the amici are, in the main, decisions in litigation between and among western states whose organic water resources laws are grounded in the doctrine of prior appropriation.  Here, the dispute is between two states whose organic water resources laws arise under the common law doctrine of riparianism (or, in modern times, regulated riparianism).  Interestingly, because the Supreme Court departed from pure riparian principles in early cases involving interstate fights over the water needs of huge urban areas like New York City, Florida contends that it is appropriate in this case for the Court to apply traditional equitable principles in addition to equitable apportionment principles that have evolved over many years of case law.  While not dismissing the argument out of hand, I think it could be a real challenge for Florida to make it stick.

Ultimately, the Court will either accept the Report and recommendations of the Special Master and dismiss Florida’s case outright, or decline to accept the Report and remand the case to the Special Master for further proceedings.  Given the deference the Supreme Court generally accords Special Masters in Original Jurisdiction cases, I think Florida, figuratively, now has to push a very heavy anchor chain up a very steep hill to stay in the fight it started.  If the State fails, locals say that the loss will likely result in a knockout blow to the oyster industry in Apalachicola Bay, which is already on the ropes.  Maybe, yes.  Maybe, no.  Maybe, not yet.  Time will tell.  Oh, well, some folks don’t like oysters, anyway….

It Ain’t Over ‘til It’s Over -- The Congressional Review Act & the Search for Zombie Regulations

Posted on December 7, 2017 by Allan Gates

Enacted in 1996, the Congressional Review Act (CRA) affords Congress the opportunity to review and disapprove final rules of federal agencies.  In the first 20 years of its existence, only one regulation was disapproved using the CRA.  In the first 100 days of the Trump administration, however, Congress invoked the CRA to disapprove thirteen separate regulations.  The White House advertised the CRA disapproval resolutions as the top legislative accomplishment of the administration’s first 100 days, proudly claiming that President Trump had signed more CRA resolutions than any other President in history.

By mid-summer most observers assumed the push to roll back Obama-era regulations using the CRA was over because the statute provides a narrow window of time for introducing resolutions of disapproval (generally 60 legislative days from the date the regulation is received by Congress), and it similarly limits the time within which expedited legislative procedures – including passage by simple majority vote in the Senate – can be used.

But wait, there’s more  – 

The window of time for introducing a disapproval resolution under the CRA begins to run on the day a regulation is submitted to Congress.  And it turns out agencies have not always been careful about sending their rules to Congress.   According to a 2014 report, hundreds of final regulations published in the Federal Register each year have never been reported to Congress.  Moreover, since the rules subject to review under the CRA are not limited to those published in the Federal Register, the report suggests there may be thousands of unreported interpretive rules, guidance documents, “Dear Colleague letters,” and the like.

Conservative activists aware of the inconsistent agency filing practices have begun to argue that all older regulations that were not reported to Congress are still subject to CRA review.  One conservative group has established a separate website, RedTapeRollback.com, proclaiming that:

“Powerful new ideas to use the CRA for older rules not reported to Congress are causing great excitement. This is a regulatory game changer!”

The website includes a database of rules it claims were not reported; and the website urges its visitors to, “Help us find and report more rules that were never submitted to Congress.”

The activists promoting use of the CRA to attack older, unreported regulations offer three rollback strategies.  First, private parties who are subject to the requirements of an older, unreported regulation could argue the regulation has never taken effect. There is certainly language in the CRA to support such an argument:

“Before a rule can take effect, the Federal agency promulgating such rule shall submit to each House of the Congress [a report containing a copy of the rule.]”

Another provision of the CRA, however, has language that may preclude a private party’s ability to obtain judicial review of claims based on the CRA:

“No determination, finding, action, or omission under this chapter shall be subject to judicial review.”

The second strategy calls for the Trump administration to identify undesirable rules that were never reported to Congress, state that the rules have never taken effect because of the agency’s failure to report them, and abandon or vacate the rules.  Under this scenario, the Trump administration would roll back undesirable rules immediately without the necessity of going through notice and comment rulemaking procedures otherwise required to repeal the rules.

The third strategy suggests the Trump administration could identify undesirable rules that were never reported, report them to Congress, and encourage Congress to adopt resolutions of disapproval.  If this occurs, Section 801(b)(2) of the CRA precludes reissuance of a disapproved rule in the same or similar form unless Congress affirmatively adopts legislation authorizing the promulgation.

It may well be that the activists’ frothy enthusiasm for expanded use of the CRA will come to very little.  It is possible, perhaps even likely, that most of the unreported rules were insignificant, unobjectionable, or even exempt from reporting and review under the CRA.  Moreover, as a practical matter it is unlikely that Congress would be willing to devote significant amounts of floor time to debate the disapproval of a large number of older, unreported regulations.  Nevertheless, a cursory examination of RedTapeRollback’s database of supposedly unreported rules cannot help but give one pause.   Think the 2010 Chesapeake Bay TMDL and EPA’s 2008 Rapanos Guidance.

Interest in use of the CRA did not end with the flurry of disapproval resolutions in the first one hundred days of the Trump administration.  At a September House Subcommittee on Regulatory Reform oversight hearing focused on agency compliance with the CRA, witnesses urged Congress to attack older regulations that were never reported to Congress.  In late October, Congress passed and the President signed a disapproval resolution invalidating an arbitration regulation adopted by the Consumer Financial Protection Bureau, an independent agency whose regulations are not ordinarily subject to Executive review and approval.

The recent surge in use of the CRA has not gone without opposition.  The Center for Biological Diversity (CBD) has filed suit to vacate a CRA resolution that nullified an Interior Department regulation limiting the methods used to hunt wolves and bears in Alaska wildlife refuges.  Among other things, CBD argues that the CRA limitation on issuance of future regulations without express approval of Congress infringes on the constitutionally protected separation of powers.  The court’s decision in the CBD case is likely to provide guidance on the reach of the language quoted above that limits judicial review of claims arising under the CRA.

Against this background it is safe to say that we have not seen the last of the CRA in the Trump administration.  As Yogi Berra once said, “It ain’t over ‘til it’s over.”

PASSING LESS GAS

Posted on December 5, 2017 by Keith Hopson

While some still debate climate change, on 11/22/17, eight of the oil and gas industry’s biggest players signed on to a set of Guiding Principles for reducing methane emissions across the natural gas value chain.  BP, Eni, Exxon Mobil, Repsol, Shell, Statoil, Total and Wintershall, in collaboration with international institutions, NGOs and academics, drafted the Guiding Principles.

The five guiding principles are: continually reduce methane emissions; advance strong performance across value chains; improve accuracy of methane emissions data; advance sound policy and regulations on methane emissions; and increase transparency.  Click here for the entire Guiding Principles document.

It will be interesting to see if these “voluntary principles” eventually become enforceable regulations.  Likewise, it will be interesting to see if these guidelines become “industry standards” and, accordingly, whether by acquiescence, private litigation, or lender requirements, become de facto regulations.

Time will tell.

It is significant to see so many major oil and gas industry actors responsibly, firmly and publicly commit to both reduce methane emissions and advance monitoring.  Perhaps now others in the industry will be more inclined to join the responsible eight and commit to pass less gas.