Posted on January 27, 2016
In an excellent December 21st blog post (“Are Obama’s Climate Pledges Really that ‘Legally Durable’?”) Richard Stoll questions two of the premises behind my assessment of the legal durability of U.S pledges at the recent Paris climate conference. In particular he challenges my conclusions that EPA’s Clean Power Plan is likely to survive judicial review and that its repeal by a new president would require a lengthy rulemaking process that could be rejected on judicial review.
First, he correctly notes that “EPA’s authority to regulate GHG emissions is not at issue in the challenges now pending in the D.C. Circuit.” But my belief that the Obama administration’s Clean Power Plan ultimately will be upheld in the Supreme Court is not founded principally on the Court’s repeated affirmation of Massachusetts v. EPA. My reasons for believing the Clean Power Plan ultimately will be upheld are discussed in detail here. I agree that it will be close, probably 5-4, with Justice Kennedy likely casting the deciding vote.
Second, Stoll argues that a new administration is free to reverse course and that there is no heightened scrutiny from reviewing courts when it seeks to do so. I agree entirely. In fact, that is precisely what the Supreme Court held in Motor Vehicle Manufacturers Ass’n v. State Farm, the case cited in my initial posting. In fact, State Farm is the very case the D.C. Circuit relied on when it applied those long-settled principles in National Association of Home Builders v. EPA, the case Stoll cites.
But the State Farm case also provides a powerful lesson that a new administration must have a good reason for changing course beyond knee-jerk opposition to federal regulation. In State Farm the new Reagan administration sought to rescind a regulation by the National Highway Transportation Safety Administration (NHTSA) that required passive restraints in new automobiles. Like the Clean Power Plan, the regulation had been the subject of considerable political controversy and it was bitterly opposed by the auto industry. Chrysler CEO Lee Iacocca had famously endorsed the notion that air bags were more suited to serve as a method of capital punishment than as safety devices. The Supreme Court later observed that “the automobile industry waged the regulatory equivalent of war against the airbag and lost.”
Less than one month after taking office, the Reagan administration reopened the passive restraint rulemaking. Two months later it postponed the effective date of the passive restraint regulation and proposed its rescission. The White House Press Office announced the decision, describing it as part of a package of “economic recovery” measures. After a six-month rulemaking, NHTSA rescinded the passive restrain regulation, despite the agency’s previous estimate that it would save 12,000 lives per year and prevent more than 100,000 serious injuries annually.
When NHTSA’s decision was challenged in the D.C. Circuit, the prevailing assumption was that “arbitrary and capricious” review was so toothless that it rarely could be used to overturn an agency’s decision. Instead, the D.C. Circuit panel struck down the rescission decision by announcing a new standard of judicial review – that sudden reversals of course by an agency required heightened judicial scrutiny. [State Farm Mutual Automobile Insurance Co. v. Department of Transportation, 680 F.2d 206 (D.C. Cir. 1982), affirmed on other grounds 463 U.S. 29 (1983)].
The Supreme Court then granted review. The Justices unanimously rejected the D.C. Circuit’s conclusion that a new administration’s sudden change of course required heightened judiciary scrutiny. But the Court surprised most observers by declaring NHTSA’s rescission of the rule to be arbitrary and capricious. In an opinion by Justice White, the Court held that NHTSA had “failed to present an adequate basis and explanation for rescinding the passive restraint requirement . . .”
What State Farm powerfully illustrates is that a new administration cannot simply impose its ideological preference for less regulation to quickly rescind a rule as the Reagan administration tried to do to eliminate passive restraint requirements. The auto industry then was as vehement in its opposition to air bags as states opposing EPA’s Clean Power Plan are now. But because the record supported the extraordinary life-saving potential of airbags, the Court held that the regulation could not be repealed without the agency coming up with a new record or a better explanation for doing so. Due to this surprising Supreme Court decision hundreds of thousands of lives have been saved and millions of serious injuries prevented.
To be sure, the Supreme Court did not order that air bags be required. Rather it required the agency to offer more than ideological opposition to regulation as a justification for repealing the rule. Archival research I conducted in the papers of the late Justice Thurgood Marshall revealed a memorandum from Justice White stating that for at least one aspect of its decision he doubted that NHTSA on remand “would find it too difficult to cover its tracks based on the present record.” I agree with Stoll that a new administration could repeal the Clean Power Plan. But State Farm cautions that it should not act too hastily if it wishes such a decision to withstand judicial review.
In the wake of the State Farm decision both President Reagan and Lee Iacocca eventually changed their minds about the merits of air bags. The fascinating story of how Transportation Secretary Elizabeth Dole helped persuade President Reagan that air bags should be required is told in Michael R. Lemov, Car Safety Wars: One Hundred Years of Technology, Politics and Death (2015). Perhaps today’s fierce opponents of EPA’s Clean Power Plan ultimately will have a similar epiphany concerning the merits of the Clean Power Plan and the transition to a greener energy infrastructure.
Posted on January 26, 2016
In 2010 the U.S. Securities and Exchange Commission issued interpretive guidance titled Commission Guidance Regarding Disclosure Related to Climate Change on how to apply existing SEC disclosure requirements concerning the risks of climate change to public companies, material climate-related trends, legal proceedings, legislation and other climate associated matters that could affect those companies. Specifically, the SEC's interpretative guidance highlighted the following areas as examples of when climate change may trigger SEC disclosure requirements:
- Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
- Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
- Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
- Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.
Although the SEC advised it would “monitor” the impact of its interpretive guidance on company filings, the SEC has yet to engage in any significant enforcement actions regarding climate change disclosures in light of its 2010 guidance. However, the New York Attorney General Eric T. Schneiderman has taken up the charge. On November 8, 2015, Peabody Energy Corporation, the world’s largest private-sector coal company, entered into a settlement agreement with the Attorney General with respect to Peabody’s statements regarding climate change in its SEC filings and other public statements. This settlement may well mark the first chapter in greater scrutiny of the substance of the climate change disclosures by companies.
Using the Martin Act (a New York state securities law that grants the Attorney General broad authority to investigate financial fraud and misleading disclosures) the Attorney General, in 2013, commenced an investigation into Peabody’s climate change disclosures. The November 8th settlement found that Peabody made two misleading public statements. First, Peabody’s statement in its annual reports filed with the SEC that it could not “reasonably predict the future impact of any climate change regulation on its business” was found to be misleading to investors. Peabody, in conjunction with its consultants, had prepared market projections of the potential impact of certain proposed climate change regulations and failed to disclose such projections. The market projections forecasted that “certain potential regulatory scenarios could materially and adversely impact Peabody’s future business and financial condition.”
Second, in several of Peabody’s SEC filings, Peabody’s disclosure regarding the International Energy Agency’s (“IEA”) projections of future coal demand failed to note the IEA’s less-favorable projections. Peabody’s discussion of the IEA’s projections misled investors by cherry picking the high case for coal usage, which “assumes that governments do not implement any recent commitments that have yet to be backed-up by legislation and will not introduce other new policies bearing on the energy sector in the future, even those that are likely to be implemented by various nations.” The IEA’s projections also include a low case for coal usage and a central position and, while the IEA does not endorse any particular scenario, Peabody omitted both the low case and central position in several of its SEC filings.
Pursuant to the settlement agreement, Peabody agreed (i) to include specific disclosures in its next quarterly report with the SEC and (ii) that in future SEC filings or communications with shareholders, the financial industry, investors, the general public and others (a) it will not represent that it cannot reasonably project or predict the range of impacts that any future laws, regulations and policies relating to climate change would have on Peabody’s markets, operations, financial condition or cash flow or (b) any citation to the IEA’s projections will include an explanation of the IEA’s various scenarios.
The NY Attorney General is also reported to be investigating ExxonMobil, under the Martin Act, over its climate change statements. While the Peabody settlement agreement reflects the Attorney General’s increased attention to climate change disclosures by energy companies, the effect may well ripple into other industries. In addition, members of the House and Senate have requested an update on the SEC’s efforts to implement the SEC’s 2010 guidance. Nonetheless, questions remain as to whether the obligation to disclosure climate change associated risks will, in fact, be action-forcing so as to result in a change in the behavior of public companies. Will those companies and the public take substantive steps to address the root causes and impacts of climate change or just continue to write detailed disclosures of the potential risks that pass muster with the regulators? Will those enhanced disclosures result in increased investor pressures sufficient to cause those companies to undertake serious, significant, and potentially costly, measures to reduce greenhouse gas emissions and become low-carbon?
Posted on January 20, 2016
In a very interesting article, Michael Burger of the Sabin Center and his co-authors suggest that, following the Paris climate agreement, § 115 of the Clean Air Act provides authority for EPA to develop economy-wide GHG emissions reduction regulations that would be more comprehensive and efficient than EPA’s current industry-specific approach. And what, you may ask, is § 115? Even the most dedicated “airhead” has probably never worked with it.
Section 115 provides that, where EPA determines that emissions from the US are endangering public health or welfare in a foreign country, it may require SIP revisions sufficient to eliminate the endangerment – but only so long as there is “reciprocity”, i.e., the foreign country:
"has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."
I love the idea. An economy-wide regime would be much more efficient. I wish that the argument made sense to me, but it does not.
The authors state that a global treaty could provide reciprocity, but then argue that “less binding commitments, including political commitments, should also suffice.” Thus, they conclude, the “Intended Nationally Determined Contributions”, or INDCs, which are the basis of the Paris Agreement, can provide reciprocity. Can you say “ipse dixit“?
They provide no precedent for this, because, as they acknowledge, § 115 has never been used. EPA started to use it once, and the authors provide two letters from then-Administrator Costle, suggesting that legally binding reciprocity is not required. However, EPA dropped the plan and the two letters were not finally agency action and were never subject to judicial review. Otherwise, the arguments simply seems to be that EPA can cloak itself in Chevron deference and that that is the end of the story.
Sorry, I don’t buy it. We’re talking about the law here. I think most judges would interpret the word “reciprocity” in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything. I don’t think it’s even a close enough question that Chevron deference will get EPA over the finish line.
The illogic of the authors’ argument seems to me to be demonstrated by their own words, when they argue reciprocity can’t mean a legally binding agreement, because that would mean that the foreign nations would be able to go to court to ensure that the US also meets its commitments under the Paris agreement, and the US would never allow that. But that’s precisely the point! Because there is no treaty, and the US would not let other nations try to enforce the US commitments under Paris, we cannot enforce theirs, and there is no reciprocity.
I wish it were otherwise.
Posted on January 11, 2016
Seth Jaffe’s recent post about the tension between Colorado’s governor and attorney general over who has the right to speak on behalf of Colorado in the Clean Power Plan litigation brought to mind the very first piece of environmental litigation I ever worked on, Village of Wilsonville v. SCA Services. In the late 1970s, SCA (which later became part of Chemical Waste Management) began operating a large hazardous waste landfill, fully permitted by Illinois EPA, in Wilsonville, Illinois, and the residents were predictably displeased. (Hint to those of you who operate similar NIMBY-ish facilities – don’t do as SCA did and disseminate marketing materials displaying the site as the “bullseye target” on a regional map showing concentric circles of distances to the facility.)
Not satisfied with some pretty effective self-help efforts (e.g. the Village dug a three-foot wide trench for “sewer repairs” across the only road into the site, thereby halting all truck traffic into and out of the facility), the Village sued SCA and Illinois EPA (the permitting agency) seeking permit revocation and a halt to operation of the facility. The case got off to an unusual start in the trial court (our firm was not retained until the unsuccessful appeal to the Illinois Supreme Court) when then-Attorney General William Scott, who had appeared in the case on behalf of Illinois EPA, stuck his finger in the air, felt which way the wind was blowing, and abandoned the defense of Illinois EPA to file his own complaint and join with the Village against the defendants, including the State agency. Perhaps unlike Colorado, Illinois law is pretty clear that the Attorney General has independent enforcement powers when it comes to environmental matters, so Scott’s volte-face didn’t cause much of a stir other than at Illinois EPA, which had never before been left hanging in the wind like this.
Bill Scott probably remains the Illinois Attorney General best known for environmental enforcement; the first line in his obituary correctly notes that he “achieved an international reputation for his battle on behalf of the environment during his four terms” as Attorney General. Scott tried but never made it to the Governor’s chair, though he clearly had what it takes. Like Otto Kerner, Dan Walker, George Ryan, and Rod Blagojevich - Illinois governors #33, 36, 39 and 40 respectively - Scott later served time in federal prison.
Over the years, notable cases of tension between disparate agencies of the same sovereign have spread from Wilsonville to Colorado to China. A recent news article notes, “Prosecutors in eastern China have filed a lawsuit against a county-level environmental protection department, accusing it of ‘failing to fulfil its regulatory duties’ in its supervision of a local sewage firm.” Apparently the United States is a successful exporter of something; I’m not sure what to call it, but it isn’t as desirable as the Fab Four or iPhones.
Posted on January 8, 2016
The Wisconsin Department of Natural Resources (WDNR) is finalizing guidance documents which will simplify how air permit applicants demonstrate that their emissions do not cause or contribute to exceedances of the PM2.5 National Ambient Air Quality Standards (NAAQS). This guidance is based upon a technical analysis showing that direct emissions of PM2.5 from most stationary sources do not meaningfully contribute to ambient concentrations of PM2.5. Building on this conclusion, WDNR will no longer require air dispersion modeling to be performed for PM2.5 when issuing most air permits. This novel state approach to PM2.5 regulation should adopted by other jurisdictions.
As EPA shifts its focus to regulating smaller forms of PM, the chemistry associated with these smaller pollutants has added to the complication of regulation. With respect to PM2.5, it is a pollutant emitted directly by certain emission sources (e.g., combustion processes) and is also formed secondarily in the atmosphere by the chemical interaction of precursor pollutants (NOx, SO2, ammonia). To date, states have generally implemented air permitting policies that simplify these complications. For example, states may assume that a percentage of a source’s PM10emissions consist of PM2.5 or that direct emissions of PM2.5 have the potential to significantly contribute to ambient concentrations of PM2.5. These generalities and assumptions have presented problems for stationary sources, especially when performing the air dispersion modeling attendant to receiving an air permit.
Recognizing these problems, WDNR undertook its own technical analysis which concludes that dispersion modeling of direct PM2.5emissions does not provide information useful for understanding the impact of those emissions on ambient air quality. WDNR found that direct, industrial stationary source PM2.5 emissions do not correlate with the ambient concentrations of PM2.5 in the atmosphere around a stationary source. Rather, PM2.5 exhibits characteristics more like a regional pollutant influenced by the emissions from numerous sources dispersed throughout a broad geographic region. Using this premise, WDNR will be restricting the circumstances when PM2.5 air dispersion modeling will be required when issuing air permits and the instance where sources will be subjected to PM2.5 emission limitations.
In this draft guidance, WDNR proposes to no longer require estimating PM2.5 emissions from fugitive dust sources, mechanical handling systems, grain handling operations or other low temperature PM sources. Rather, PM2.5 emission estimates will only be required for combustion and high temperature industrial processes that directly emit significant amounts of PM2.5. For these high temperature sources, WDNR will use a “weight of evidence” approach to conclude that direct emissions of PM2.5 do not cause or exacerbate a violation of the PM2.5 NAAQS or increments in ambient air. This will greatly simplify the manner in which air permit applicants must calculate PM2.5 emissions from a project, significantly limit the circumstances in which PM2.5 modeling must be performed as part of a permit application and restrict the instances in which PM2.5 emission limitations must be included in air permits.
Posted on January 7, 2016
The Paris Agreement on climate change reached on December 12, 2015 has a heavily negotiated sentence that, when closely read, seems to call for the virtual end of fossil fuel use in this century unless there are major advances in carbon sequestration or air capture technology. That, in turn, has important legal implications.
Article 4 Par. 1 says, “In order to achieve the long-term temperature goal … Parties aim to reach global peaking of greenhouse gas emissions as soon as possible … and to achieve rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.”
In other words, what goes up should be taken back down: for every ton of greenhouse gases (GHGs) emitted from a smokestack, tailpipe or chopped tree, a ton should be removed.
According to the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (2014), fossil fuel use emits about 32 gigatons of carbon dioxide per year. Other sources, such as methane leakage, cement manufacture, and other industrial processes add another 5-7 gigatons carbon dioxide equivalent. Deforestation and other agriculture, forestry and other land use changes (but subtracting emissions sequestered by forest growth) add yet another 10-12 gigatons a year. This all adds up to about 49 gigatons. However, global carbon sinks remove only about 18 gigatons per year (8.8 to the oceans, 9.2 to land, not including land use changes).
Thus the sinks take up about the equivalent of the non-fossil sources. In order to achieve a “balance” between emissions and sinks, we need to just about end the release of GHGs from fossil fuels, though a radical increase in sinks or reduction on non-fossil fuel emissions would provide some slack.
Assuming that some kind of balance between emissions and sinks can be achieved, would we actually have until 2099 to decarbonize the economy, as these numbers imply is needed? Not really. Kelly Levin, Jennifer Morgan and Jiawei Song at the World Resources Institute provide here an illuminating overview of what is required to achieve the long-term temperature goal in Article 2 of the Paris Agreement (“holding the increase in global average temperature to well below 2° C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5° C”). As the WRI post notes, a recent paper in Nature Climate Change suggests that carbon dioxide from electricity would have to be brought close to zero by 2050, and by then around 25 per cent of energy required for transportation would also need to come from electricity (up from less than one per cent now).
There seem to be only three ways to continue to use fossil fuels for electricity in the second half of the century (and for transport by the end of the century) and still meet the temperature goal:
- Capture the carbon before it escapes into the air, and sequester it
- Devise, and deploy on a massive scale, technologies to remove the carbon from the air, and sequester it
- Create new sinks, such as through the immediate halt to deforestation and a worldwide program of tree planting
All three of these raise a question of how long the carbon will be stored; we do not know how long carbon will stay in reservoirs, and we do know that trees do not live forever, and when they burn or die they release their carbon. Moreover, the technologies of carbon capture and sequestration, and of removing carbon from the ambient air, are developing slowly and are nowhere near large scale deployment. (A price on carbon would create an economic incentive to develop and use these technologies, but politicians in most places are unwilling to impose such a price. A large-scale government-funded research effort, such as the ones that put human beings on the moon, could also produce the necessary innovation, but there has been little visible support for such an effort.) Most of the industrial carbon sequestration that now occurs goes toward “enhanced oil recovery” – squeezing oil out of depleted reservoirs – but extracting more oil is not compatible with stopping fossil fuel use.
Finding the land for large scale tree planting would face its own challenges in a world where sea level rise, persistent drought, and extreme heat will be rendering much land unsuitable for growing food.
So meeting the demands of society for energy means a combination of aggressive energy efficiency and conservation programs, the installation of renewable energy (and, perhaps, nuclear), and the substitution of electric or hydrogen vehicles for those using petroleum at an unprecedented pace. The Deep Decarbonization Pathways Project has set forth the colossal amount of new facility construction that would be required worldwide to achieve this.
The Paris Agreement calls on all countries to strengthen their pledges to reduce GHG emissions, and to monitor their progress and report it to the world. It also says that “all parties should strive to formulate and communicate long-term low greenhouse gas emission development strategies.” (Article 4 Par. 19) That looks like strategies under which every country must show how it is controlling its fossil fuel use.
These provisions are not legally enforceable. However, many domestic laws are, and they will become a powerful tool to force early planning, or at least disclosures. One key example is the securities disclosure requirements for publicly traded companies. On January 27, 2010, the U.S. Securities and Exchange Commission issued guidance for the disclosure of climate-related risks. It specifically calls on companies to “consider, and disclose when material, the impact on their business of treaties or international accords relating to climate change.” The Paris Agreement is clearly such an accord, and (if it is vigorously implemented) it will have material impact on many companies in the business of extracting, processing and using fossil fuels, or making things that rely on fossil fuels (such as motor vehicles, ships and airplanes). The SEC’s guidance makes clear that management’s discussion and analysis should explore known trends and uncertainties concerning climate regulation. This includes regulation outside the U.S. that can affect the operations abroad of U.S. companies. Therefore, disclosure can be expected of the effect of severe restrictions here or in other countries on fossil fuel use, including the possibility that most fossil fuel reserves will need to stay in the ground.
Climate disclosures have received increased attention since it was reported in November that New York Attorney General Eric Schneiderman is investigating ExxonMobil under the New York securities law, the Martin Act, over its statements about climate change, and had reached a settlement with Peabody Energy.
This is not necessarily limited to U.S.-registered companies. For example, in April 2015 the G20 finance ministers and central bank governors asked the U.K. Financial Stability Board for advice on the financial stability implications of climate change. In November 2015 this Board proposed the establishment of a disclosure task force to develop voluntary disclosures for several climate-related risks, including “the financial risks which could result from the process of adjustment towards a low-carbon economy.”
Going forward, impact review of energy projects under the National Environmental Policy Act and its counterparts in many states and most other developed countries should consider the phase-out of fossil fuels that is inherent in the Paris Agreement. For example, a proposal to build or finance a coal mine, a coal-fired power plant, or a coal port should consider whether the facility would need to be closed before the end of its otherwise useful life, and whether the project would be inconsistent with the Agreement.
Systematic analysis and disclosure of these risks will lead responsible boards of directors to undertake serious planning to effect an orderly transition to the low-carbon world that 188 countries agreed to in Paris. These disclosures will also help investors decide what companies will thrive in such a world (such as developers of technologies for renewable energy and efficiency), and what companies are failing to prepare for the transition and thus will themselves become fossils.
Posted on January 5, 2016
The Paris Agreement resulting from the COP21 Climate Conference was extraordinary, far better than any of the pundit “experts” expected (indeed most were predicting gloom and doom until the very last minute). That the conference organizers could get 190 countries that had been quarreling with each other through 20 prior unsuccessful conferences, and many of which have little mutual respect, to come together to unanimously support an agreement of substance on a subject as complex, huge, costly and politically difficult as tackling climate change, is nothing less than a miracle.
Christiana Figuerez and the French negotiating team were brilliant in asking only that countries submit voluntary Independently Nationally Determine Contributions (INDCs) rather than a repeat of conference mandated so-called “binding” carbon reductions as required in the unsuccessful Kyoto Protocol, binding only on developed countries that ratified (and even then signatory Canada simply withdrew). Their pre-conference preparatory work and skillful conference conduct was critical to its success.
The momentum that was built up as virtually all the countries, large and small, rich and poor, made meaningful submissions was such that it would have been very difficult for any of one nation to spoil the broth.
Indeed, the momentum was so great that even previously very reluctant China, India, S. Africa and Brazil agreed to mandatory verification provisions, extremely important to the effectiveness of the Agreement.
That the INDCs were not sufficient to meet the IPCC scientists’ assessment of need to reduce global temperature increases to no more than below a 2.5 Celsius degrees above pre-industrial revolution levels was to be expected. But that the parties agreed to meet every 5 years to make further contribution pledges, again despite powerful country reluctance, was a vital success.
One little touted success was a provision to have the Agreement recognize the climate mitigation contributions of non-national organizations, states, provinces, cities, businesses and NGOs, a provision on which I and a group from Yale dubbed The Yale Dialogue, worked very hard to get included. Their inclusion is very important since many of them have already achieved much more than their national governments have been able to pledge. Perhaps most importantly, it is they that ordinarily are the key actors in establishing energy efficiency standards and often renewable energy incentives. The Paris Agreement doesn’t call for ratification until 2020, and progress before then will fall largely on their shoulders.
While the task before all the countries of the world to achieve the goals sought through the Agreement is daunting, the Paris Agreement has gotten the world off to a wonderfully good start.
Posted on December 30, 2015
There’s been a disturbance in The Force. On December 4, 2015, Environmental Jedi across the galaxy felt that subtle hitch in the harmonious heartbeat of the universe due to some cosmic, regulatory insult. That sense of loss warned Jedi everywhere that Balance has been tipped, Light has been dimmed, and Nature has been nicked.
On that day, a former Senator, now Galactic Emperor, affixed his signature to a benign sounding decree from the Legislative Houses of the Republic known as the FAST Act (Fixing America’s Surface Transportation Act, see House Report 114-357). Buried beneath 550 pages of directives and declarations about everything from intergalactic traffic lights to hyper-space railroad switchyards lay a seed of great detriment that wary but weary policy watchers had not noticed. While the Jedi have been exposed to this loathsome idea before, their continual resistance to the Dark Side’s alluring arguments about “emergency” and “public need,” must have faded like dim memories of policy battles a long, long time ago in a galaxy far, far away. For just a single page of text in a section numbered 61002 slipped through seemingly without notice and certainly without ignition of even a single lightsaber.
The Emperor’s executive agency—ominously known in previous days as the “Federal Power Commission”–—has long had authority to declare an “emergency” by reason of “a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or transmission of electric energy, or of fuel or water for generating facilities, or other causes” and then to order electric utilities to take responsive action (16 U.S.C.A. § 824a(c)). Now, with the authority of a fully-armed and operational FAST Act, electric utility actions or omissions in response to such orders that violate federal, state or local environmental laws or regulations shall not be considered violations, shall not subject the electric utility to civil or criminal penalties, and—for the love of Obi-Wan—shall not subject such a party to “a citizen suit under such environmental law or regulation.” Electric utilities supplying emergency power to those in need will avoid any Imperial entanglements. To coin a phrase, “These aren’t the violations we’re looking for. . . .You can go about your business. . . . Move along. . . . Move along.”
What the most destructive hurricanes and sea storms in recent interstellar history could not do, has now been done. What a lack of power, potable water, sanitation, health care, police protection and basic transportation for entire cities did not justify, has been written into law now, apparently without a fight. Where were the Jedi? What Imperial plot lies in back of this development?
Under the previous Emperor, everyone knew such an exculpatory policy was completely unnecessary and would wreck the environment like the Death Star wrecked Alderan. But now no outcry? No rescue? Is the Resistance powerless? Where is Luke? Has Leia lost her lightsaber? Are the Jedi extinct or has their attention simply been frozen in carbon? Perhaps this is just another reason to anticipate eagerly Episode VIII, where all ambiguities will be explained without need of Chevron Step One. May The Force be with you in 2016!
Posted on December 22, 2015
Mark Twain once wisely warned:
We should be careful to get out of an experience only the wisdom that is in it -- and stop there; lest we be like the cat that sits on a hot stove‑lid. She will never sit on a hot stove-lid again -- and that is well; but also she will never sit down on a cold one any more.
While trying to clear the collapsed entrance to the inactive Gold King Mine in Colorado, EPA contractors in August 2015 inadvertently released over 3 million gallons of metal-laden wastewater into a tributary of the Animas River. Partly because of EPA’s involvement, and partly because high iron levels turned the Animas River orange for several days, the incident generated considerable controversy and attention.
Subsequent views about what we should learn and do as a result of this spill have been quite divergent and, in this writer’s view, off the mark.
As might be expected during this election season, one response was protracted administration-bashing Congressional hearings, aimed at the heads of both EPA (criticizing the Agency for not better controlling its contractor at this remote mountain site) and the Department of the Interior (which has no responsibility for the site but issued a requested report on the spill). Not surprisingly, these blame-and-shame hearings were not focused on, and did not produce, constructive information or plans for preventing such events in the future. However, they did cause EPA remedial efforts and related U.S. transactions at inactive mine sites to be put on hold, which was counter-productive for dealing with this problem.
At the other extreme, some environmental advocates have asserted that this wastewater release from an inactive mine supports their view that U.S. mining law should be fundamentally overhauled, including to provide for substantial royalty payments to the government and imposition of major financial assurance requirements on miners under CERCLA Section 108. Those calls ignore the fact that this historic site pre-dates subsequently adopted mine reclamation and bonding requirements imposed on current mines under state and federal law. They also represent a sea-change in mining law that goes far beyond this inactive mine issue, would occur at a difficult economic time for the mining industry, and is unlikely to gain traction in this polarized political climate.
Congressional reactions reflect those widely disparate positions, with new proposed bills ranging from a narrow proposal for grants to mining colleges to study the problem (H.R. 3734) to a broad mining reform act that imposes substantial new fees and royalties (H.R. 963). One other proposed bill would freeze DOI’s Abandoned Mine Lands (AML) Program at $17 million per year and institute a “Good Samaritan” program to encourage third-party volunteer clean-ups at AMLs (H.R. 3843), and another would create a foundation to accept donations for AML cleanups, with one-time matches from the federal government of up to $3 million per year (H.R. 3844).
Many of these proposals are either political posturing or over-reaching, and others do not focus on or effectively address the problem of abandoned mines. Moreover, they either are unlikely to go anywhere in Congress, or would accomplish little if they do.
However, there are effective steps we should take if we learn the following key lessons provided by the Gold King spill:
· There are tens of thousands of abandoned mines like Gold King that are already discharging polluted wastewater to thousands of miles of streams. If we do nothing, such discharges will continue and worsen, and occasional blow-out releases like Gold King are inevitable.
· The damage and economic impacts caused by these abandoned mine sites are real and will increase.
· These mine sites are very complex and expensive to fix.
· Some states and volunteer entities are willing to address these sites if existing liability disincentives can be removed.
Given these circumstances, we should focus on practical approaches that will achieve real, near-term, on-the-ground remedial actions. Furthermore, the approaches must be backed by meaningful sources of funding, and be politically achievable in the current, polarized political climate.
A good start would be adopting an effective “Good Samaritan” law addressing the existing disincentives for third parties to remediate abandoned and inactive mine sites, coupled with meaningful federal funding initiatives. The Keystone Policy Center is currently working to achieve consensus on such an approach.
A second practical approach would be to use CERCLA National Priority List (NPL) designation at select sites to provide funding where no viable mine operators remain. The Gold King incident has served as a catalyst for removing past local opposition to NPL listing for the upper Animas River drainage. That’s a good beginning.
We should heed Twain’s advice and use the real lessons of Gold King to move beyond politics and take practical steps like those noted above to start fixing these old mine sites. And we should stop getting mired in the same, currently dead-end debates that lead to doing nothing and can be put aside for another day – lest we be like the cat that will never sit on a cold stove-lid.
Posted on December 21, 2015
In his December 16 ACOEL post Professor Robert Percival concludes that President Obama’s Paris GHG reduction pledges are most likely “legally durable.” Two of his key points: (1) EPA’s Clean Power Plan (CPP) – from which the bulk of the Obama pledges are comprised – will likely survive judicial review; and (2) any effort by a new President to undo the CPP would require a lengthy rulemaking process that could be rejected on judicial review.
The CPP may ultimately survive judicial review, and any attempt by a new President to undermine the CPP may ultimately fail. But with due respect to Professor Percival, I submit the GHG reduction pledges may be far less “legally durable” than he suggests.
Judicial Review Prospects.
Professor Percival notes that the Supreme Court has “repeatedly upheld EPA’s authority to regulate GHG emissions.” But EPA’s authority to regulate GHG emissions is not at issue in the challenges now pending in the D.C. Circuit. (Consolidated under the lead case West Virginia v. EPA.)
Rather, the issues relate to how far can EPA go with the words of the Clean Air Act (CAA) to regulate GHG emissions. I think most would agree that EPA seeks to go pretty far with a few words in CAA 111. One key issue is whether the words authorizing imposition of “best system” emission limits upon “stationary sources” confer authority to require owners of coal-fired stationary sources to replace their plants with solar and wind energy sources.
In my view, whether the CPP will survive in the D.C. Circuit may well depend upon the composition of the 3-judge panel selected by lot. The 17 active and senior judges on that Court represent an amazingly wide spectrum of philosophies. But the cases will probably then go to the Supreme Court – and there, I think EPA will have a pretty tough (but maybe not impossible) time. Last year, the Court rejected parts of EPA’s GHG regulatory scheme in its UARG opinion. The Court expressed strong distaste for EPA regulations with questionable grounding in the CAA’s words – particularly “where an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy.”
A New President’s Prospects.
Virtually every Republican Presidential candidate has vowed to undo most or all of the CPP (assuming it has not been rejected on judicial review). I take no position on whether he or she should do this. But I do believe it could be done fairly quickly and in a manner likely to survive judicial review.
I direct your attention to Nat'l Ass'n of Home Builders v. EPA. Writing for a unanimous panel in an EPA case, Chief Judge Garland (an Obama appointee – joined by Judge Rodgers, a Clinton appointee) quoted extensively from recent Supreme Court opinions. In Part II(A) of Judge Garland’s opinion (pages 1036-38) and Part IV (page 1043), the following points come through strong and clear:
a. A new administration is free to reverse rules issued by a prior administration based entirely upon policy preferences, even where there are no new facts or information, so long as the new administration adequately explains the basis for the reversal;
b. There is no heightened standard of judicial review when an agency reverses course; and an agency need not convince the court that the reasons for the new policy are better than the reasons for the rejected one.
Thus the “lengthy rulemaking process” envisioned by Professor Percival need not be so lengthy. A new administration would not need to develop a new factual record – it would merely have to carefully explain in its rulemaking the legal and policy reasons why it was undoing parts or all of the CPP. There is no reason this could not be accomplished within a year or two, and reductions required under the CPP do not begin kicking in until 2022.
Posted on December 17, 2015
As Annette Kovar recently predicted in her blog, the Supreme Court granted cert in United States Army Corps of Engineers v. Hawkes Construction., Inc. (15-290) to resolve a split in the circuit courts on the question whether a jurisdictional determination (JD) under the Clean Water Act constitutes “final agency action for which there is no other adequate remedy in a court" and is therefore subject to judicial review under the Administrative Procedure Act.
In Hawkes , the Eighth Circuit held that the JD was a final agency action subject to the APA. The case arose after a company sought to mine peat from wetland property owned by two affiliated companies in northwestern Minnesota. The Corps’ JD found that the wetlands onsite were "waters of the United States" and were therefore subject to the permit requirements of section 404 of the CWA. This decision runs counter to the Fifth Circuit decision in Belle Co., LLC v. U.S. Army Corps of Eng’rs.
Both courts evaluated the reviewability of JD’s in light of Sackett v. EPA, which held that property owners may bring a civil action under the APA to challenge EPA's issuance of a CWA §309 compliance order directing them to restore their property immediately pursuant to an EPA work plan and assessing penalties of $37, 500 per day for failure to comply. The Fifth Circuit in Belle declined to apply Sackett on the ground that a JD does not have the same legal consequences as a 309 compliance order. The Eighth Circuit disagreed and held that a JD presents landowners with a Hobson’s choice requiring them “either to incur substantial compliance costs (the permitting process), forego what they assert is lawful use of their property, or risk substantial enforcement penalties.”
In my view the Fifth Circuit has the better reading of Sackett and the governing law on what constitutes final agency action. The Supreme Court uses a two prong test to determine finality: first the action must “mark the consummation of the agency’s decision making process;” and second “the action “must be one by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear There is no question that a JD satisfies the first prong. But a JD does not meet the second prong for at least three reasons. First, a JD does not determine the rights and obligations of the landowner for the simple reason that the statute has already done that. Section 301 of the CWA prohibits any discharge by any person to a water of the US without a permit. The landowner’s legal obligations are exactly the same with or without the JD.
Second, unlike the compliance order in Sackett, a JD does not compel the landowner to take any action at all. Nor does it expose the landowner to penalties, let alone the double penalties at issue in Sackett. The JD notifies the landowner that a permit may be required for discharging dredge or fill material into the wetland unless one of the statutory exclusions such as prior converted cropland apply. However as the Fifth Circuit said, “even if Belle had never requested the JD and instead had begun to fill, it would not have been immune to enforcement action by the Corps or EPA.”
Third, the Eighth Circuit was simply wrong to equate the practical consequences of a JD putting the landowner on notice that a permit was required with Bennett’s requirement that the action must have legal consequences. In Bennett the action at issue was a biological opinion issued under section 7 of the Endangered Species Act. The Court found that under the ESA “the Biological Opinion at issue here has direct and appreciable legal consequences;” namely, that it curtailed the authority of the Bureau of Reclamation to provide water for irrigators from federal reservoirs in order to protect endangered fish. Nothing remotely similar to that follows from the issuance of a JD.
Finally the Court ought to be leery of broadening the reach of the APA to include actions having practical effects but not actual legal consequences. That could sweep in a large number of federal actions that have never been thought of as justiciable controversies—for example notices of violations which arguably trigger even more immediate and serious consequences than JD’s. Regulated entities are not the only ones who might benefit from a relaxation of the APA’s finality requirement. Environmental plaintiffs would gain increased access to the courts as well.
Posted on December 16, 2015
As part of a global agreement on climate change, the US has pledged, among other things, to reduce its greenhouse gas (GHG) emissions by 26%-28% compared to 2005 levels by the year 2025. But opponents of President Obama argue that he cannot keep his promises made at the Paris climate summit.
The Obama administration is confident that the US can meet its promise based on the regulatory actions already taken by the US Environmental Protection Agency (EPA) and other federal agencies to reduce GHG emissions, part of a broad Climate Action Plan announced by President Obama in June 2013.
In transportation, US fuel economy standards set by the EPA have been raised dramatically. And earlier this year the EPA issued regulations to control GHG emissions from power plants, which led to a final rule known as the Clean Power Plan.
The Clean Power Plan will require states to reduce GHG emissions from existing power plants by 32% by the year 2030. It is expected to accelerate the retirement of coal-fired power plants as electric utilities increasingly shift to natural gas and renewable sources of energy.
Yet even as US negotiators arrived in Paris for the climate summit, Obama's political foes were questioning his authority to sign an international agreement on climate change.
Senate Majority Leader Mitch McConnell argued that the US cannot meet its promises to the global community because the Clean Power Plan is "likely illegal" and will either will be struck down in court or be revoked by a new Republican president.
So how strong is the legal defense of Obama's signature climate initiatives?
Going to the Supreme Court?
Having the Clean Power Plan struck down in court seems unlikely for a number of reasons. These include the fact that the US Supreme Court repeatedly has upheld EPA's authority to regulate GHG emissions under the Clean Air Act, beginning in 2007 with its decision in Massachusetts v EPA.
On the other hand, a new president working with congressional opponents of climate action could undermine the US commitment. Let's consider the legal possibilities.
The Congressional Review Act provides special fast-track procedures that allow Congress to veto regulations issued by federal agencies within 60 legislative days of their issuance. But before such a joint resolution of disapproval can take effect, it requires either presidential approval or the override of a presidential veto by a two-thirds majority in each house of Congress.
The signature policy of Obama's climate strategy is the EPA Clean Power Plan to regulate CO2 from power plants. Opponents are already challenging it in court. haglundc/flickr, CC BY-NC
As a result, the only time this procedure has been used successfully was shortly after a change of administration. In March 2001 new President George W Bush signed a disapproval resolution blocking regulations issued at the end of the Clinton administration to protect workers from repetitive motion injuries.
Congress is trying to use the Congressional Review Act to disapprove EPA's greenhouse gas regulations, but such a vote is entirely symbolic because President Obama has promised to veto the disapproval resolution and the 60 legislative day period will end long before the 2016 election. Thus, as long as a president committed to climate action remains in office, the Congressional Review Act is not a promising option.
Dramatic versus piecemeal attacks
A new president opposed to climate action could direct EPA to repeal its regulations, but this would require the agency to undertake a lengthy rulemaking process to comply with the Administrative Procedure Act that governs how agencies adopt regulations. Any agency decision to revoke the regulations would be challenged in court and could be overturned.
The courts have played a role before in attempts to reverse regulations. When President Reagan's Department of Transportation rescinded its air bag regulations, the Supreme Court held that it had acted arbitrarily and capriciously because the decision was not supported by the factual record showing that air bags save lives.
There will be legal challenges to the EPA Clean Power Plan, but the Obama administration thinks it's on solid legal ground. vagueonthehow/flickr, CC BY
And when the Supreme Court in 2011 rejected state efforts to hold electric utilities liable for climate change under the federal common law of nuisance, it pointedly noted that any future EPA decision not to regulate GHG emissions would be subject to judicial review.
Working with a new president sympathetic to opponents of environmental regulation, Congress could repeal or amend the Clean Air Act, the legal foundation for EPA's regulations of GHG emissions. However, the Clean Air Act has been remarkably resistant to past legislative onslaughts. It is, after all, thanks to the Clean Air Act that the "airpocalypses" choking major cities in China and India right now do not happen in the US.
Another option for a future Congress would be to adopt targeted amendments to deprive EPA of authority to implement the Clean Power Plan and other GHG regulations if there are enough votes in the Senate to overcome a filibuster. Congress also could use the power of the purse to withhold funds for actions necessary to implement any Paris agreement, including US promises of financial aid to help poor countries adapt to climate change.
The Paris climate conference is being conducted pursuant to the UN Framework Convention on Climate Change, a treaty signed by President George H W Bush in June 1992 and ratified unanimously by the US Senate on October 7 1992. President Obama believes he already has sufficient legal authority to implement any agreement made in Paris and thus he does need not to ask Congress for new approval.
There is precedent for this. In 2013 the US was able to accede to the Minimata Convention on Mercury without congressional approval because existing law already provides the president with sufficient legal authority to implement its requirements.
For decades, the principal argument by opponents of US climate action has been that the US should not act until developing countries agreed to control their GHG emissions. That argument was dramatically undermined in November 2014 when China agreed to control its emissions, in a joint announcement with the White House.
The claim that other countries will not control their emissions has now been laid to rest in Paris with a new global agreement requiring all countries to do so. Now that the entire world has recognized that all nations must act to combat climate change, it would be the height of folly for a new president and Congress to reverse course.
This article was originally published on The Conversation. Read the original article.
Posted on December 15, 2015
Paris—In the run-up to the Conference of the Parties to the Climate Change Convention, a short humorous video, “Earth to Paris,” was widely viewed. It was a call to delegates for take serious action on climate change at the conference.
The Paris Agreement is being hailed as an historic breakthrough by political leaders, nongovernmental organizations, and the business community. It represents the first time since the Framework Convention on Climate Change was opened for signature in 1992 that all 196 parties have agreed to take actions to reduce their greenhouse gas emissions. The only prior agreement even remotely comparable to the Paris Agreement—the Kyoto Protocol—limited only developed country emissions.
Not only was there unanimous approval of this agreement—a remarkable feat in itself—but its overall goal is ambitious. Countries agreed to hold “the increase in the global average temperature to well below 2 °C above pre-industrial levels.” They also agreed to “to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.” The parties thus increased somewhat the level of ambition from limiting warming to 2 °C, which had been the consensus objective.
They also agreed to “aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter.” That, too, is new.
And unlike Kyoto, this agreement puts primary responsibility for what happens in particular countries where it has always been—with the countries themselves. This is through the mechanism of nationally determined contributions (NDCs)—public commitments that nearly all countries made prior to Paris to reduce their greenhouse gas emissions to some extent. The Paris agreement affirmed those agreements and made them central to the global climate change effort.
But what also sets the Paris Agreement apart—and will ultimately determine whether humanity averts or limits the worst effects of climate change—are processes that the agreement puts in place to periodically increase national ambition, assist countries in meeting their objectives, share information, and ensure methodological consistency in accounting for emissions reductions. These processes should greatly enhance the likelihood that the Paris Agreement will actually work.
Processes in the Paris Agreement that embody this approach include the following:
- Beginning in 2020, and every five years afterwards, each country is to “communicate and maintain successive nationally determined contributions that it intends to achieve.” These, of course, are in addition to those that countries already submitted. Each “successive nationally determined contribution” is to “represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition.”
- While financial assistance to developing countries has always been part of the international framework to address climate change, developed countries agreed to increase their level of financial support from previous levels by a nonspecific amount. Developed countries also agreed to communicate “indicative quantitative and qualitative information” about their financial support to developing countries, including projected future levels of public finance.
- Beginning in 2023, and every five years afterwards, the conference of the parties is to “take stock of the implementation of this Agreement to assess the collective progress towards achieving” its purpose. The outcome of this “global stocktake” is to “inform Parties in updating and enhancing, in a nationally determined manner,” including enhanced “international cooperation for climate action.”
- The agreement creates “an enhanced transparency framework for action and support.” This framework is partly to understand what NDCs actually mean and achieve. NDCs from different countries use different assumptions and baselines, and enhancing their comparability is essential. This transparency framework is also to better understand what financial contributions developed countries are actually making to developing countries.
- Recognizing that “[a]ccelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development,” the agreement creates a Technology Mechanism. The purpose of the mechanism is to facilitate technology development and the transfer of technology to developing countries. The “global stocktake” is to consider this and other efforts to support “technology development and transfer for developing country Parties.”
These processes are different from the kind of obligations we are used to in environmental law–obligations, for example, to reduce greenhouse gas emissions by a certain amount by a certain date. Rather, these processes may be understood in terms of reflexive law and governance. Reflexive approaches are not substantive rules: they improve the capacity of governmental institutions and other entities to learn about themselves and their actions. Reflexive approaches also stimulate them to use this information to make appropriate changes. They create spurs to action.
In the context of the Paris agreement, reflexive governance seems intended to perform at least four key tasks. First, it should encourage or prod governments to be more ambitious over time, without being prescriptive about what they should do. This is true not only of emissions reductions but also, for developed countries, of their efforts to provide financial and technological resources to developing countries. Second, it will provide information to governments and others about what other governments are actually doing, as well information about the effectiveness and impacts of particular laws and policies. This information can then be used to modify those laws and policies. Third, because this information will be public, it means that governments are more likely to honestly and openly share what they are doing, and be responsive to the views of nongovernmental organizations and businesses as well as the public in general.
Finally, there are few areas in law and policy in which the playing field is changing faster than in climate change. The changes are not just new agreements, but also the rapid upscaling of renewable energy as its price drops, the wide variety of international coalitions working to accelerate greenhouse gas emission reductions in particular areas or sectors, changes in the emissions profiles of China and India over the past decade, improvements in our understanding of the science, and the greater availability of private finance. The Kyoto Protocol, hailed as an advance when approved in 1997, looks like a relic less than 20 years later.
These and other processes in the Paris Agreement are more likely to survive, accommodate, and address this shifting landscape in the years ahead. One could wish for a stronger agreement, but these processes are likely to make the global partnership to address climate change stronger and more effective over time. And they are particularly likely to do so because every country agreed to the ambitious goals toward which they are aimed.
Orginially posted on www.johndernbach.com
Posted on December 11, 2015
In my latest blog, I related that New Jersey Superior Court Judge Julio Mendez had taken under advisement the City of Margate’s request for an evidentiary hearing on the reasonableness of the state’s condemnation of easements on 87 City-owned lots. The request had stressed the public’s express opposition to dunes (2 referenda) and the alleged superiority of bulkheads and seawalls for both bay and ocean front properties.
Well, the Judge ruled on Tuesday, December 8, to grant Margate’s Motion to hear its argument in a February hearing on alleged abuse of the state’s eminent domain power. Margate also challenged the Corps of Engineers’ reliance on a 20-year old study, claiming that the study was outdated and its beach protections were as good as, if not better than, dunes.
If Margate’s arguments are successful, Governor Christie’s 127 mile Sandy Relief Act program would have an approximate 1½ mile gap in continuity (its neighbors Ventnor and Longport have agreed to give the state easements to build dunes).
Next month look for the lowdown on Judge Mendez’ decision in Part 8 of my series, “Doin the Dunes.”
Posted on December 10, 2015
The U.S. Supreme Court will likely agree to review the decision of the Eighth Circuit Court of Appeals in Hawkes Co. v. U.S. Army Corps of Engineers. So said John Cruden, Assistant Attorney General for Environment and Natural Resources and College Fellow, to the 2015 National Clean Water Law Seminar. He described the Hawkes case as the second generation of the U.S. Supreme Court’s Sackett v. EPA decision in 2012.
As noted here, the Hawkes case is another wetlands case, this time about a Minnesota peat farming company that applied for a permit from the U.S. Army Corps of Engineers under the Clean Water Act to expand its peat mining operation. The Corps advised Hawkes that it had made a preliminary jurisdictional determination (JD) that the property on which the expansion was planned included regulated wetlands requiring a more extensive environmental assessment. Despite Corps staff attempts to dissuade continuing with the permitting process, Hawkes challenged the preliminary JD. The Corps subsequently prepared an Approved JD and ultimately issued a Revised JD after its own internal review raised issues of concern. The Eighth Circuit Court of Appeals held that the Corps JD was a judicially reviewable final agency action under the Administrative Procedure Act (APA). Previously, the Fifth and Ninth Circuit Courts of Appeal had ruled that a Corps JD was not a judicially reviewable final agency action. The Hawkes case sets up a split in the Circuit Courts making Supreme Court review more likely.
One might recall that the Supreme Court’s unanimous Sackett v. EPA decision held an EPA compliance order, alleging the Sacketts had violated the Clean Water Act by placing fill material on their property without a permit and requiring restoration of the property, was a final agency action and subject to judicial review under the APA. The Supreme Court concluded the Sacketts had no other adequate remedy at law and further stated that the APA creates a “presumption favoring judicial review of administrative action.” Justice Scalia, writing for the Court, said this “presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all.” He continued that nothing in the CWA can be read to enable or condone “the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review—even judicial review of the question whether the regulated party is within EPA’s jurisdiction.” Clearly, principles of fundamental fairness and due process underlie the Sackett decision.
If one goes back to the Hawkes case, note that the Corps describes its preliminary and Approved JDs as tools-- i.e. guidance, to help implement the Clean Water Act, and not orders. JDs probably do streamline the permitting process because an applicant will know what the Corps’ position is before investing heavily in a permit process and may decide to abandon the project. But, there is a hint of “strong-arming” tactics in the Hawkes case that does not bode well for a deferential decision by the Supreme Court to the Corps. However, even if Corps’ JDs become subject to judicial review in the future, won’t a reviewing court still ascribe a certain amount of deference to the Corps’ expertise under APA standard of review precedents? Wouldn’t the Corps have to defend its JD at some point if challenged? Will the Corps really lose much by defending its JD sooner rather than later?
Posted on December 9, 2015
I have never understood why 43 states – including the great Commonwealth of Massachusetts – have independent elected attorneys general. I’m sure my new colleague, former Massachusetts Attorney General Martha Coakley, would disagree with me, but I just don’t think that the value of having an AG independent of the Governor is worth the lack of policy consistency. Exhibit A to my argument is the current dispute in Colorado between Governor John Hickenlooper and Attorney General Cynthia Coffman concerning EPA’s Clean Power Plan. What’s the problem?
Hickenlooper supports the CPP; Coffman opposes it. Indeed, Coffman does not just oppose it; on behalf of the State of Colorado, she’s joined the litigation seeking to stop the rule. Excuse me, but shouldn’t the Governor speak for the citizens of Colorado on such matters? Absent some kind of conflict of interest requiring independent counsel, the Governor has to be the boss. I’m sure most citizens see it that way; it would be nice if reality mirrored perception.
I’d assume that the Colorado Governor has authority to retain separate counsel – and I hope my friends in Colorado will tell me if I’m wrong. I’d love to see Governor Hickenlooper retain his own counsel and intervene in the litigation on the side of EPA. What would the Court do if Colorado appeared on both sides of the V?
Posted on December 7, 2015
To answer the question posed above - in New Jersey, plenty! Under several New Jersey environmental statutes regulating, inter alia, development, the least that can happen if historic preservation issues are overlooked is a delay of the project. The worst is a criminal indictment of the developer and/or its consultants.
Regulations implementing the Coastal Area Facility Review Act (N.J.S.A. 13:19-1 et seq.), the Waterfront Development Law (N.J.S.A. 12:5-3), the Wetlands Act of 1970 (N.J.S.A. 13:19-1 et seq.) and the Freshwater Wetlands Protection Act (N.J.S.A. 58:10A-1 et seq.) in effect require a historic preservation analysis in order to obtain approvals. Using as an example the Freshwater Wetlands Protection Act Rules, (N.J.A.C. 7:7A-4.3(b)5), an applicant must first determine if the property to be developed and the surrounding properties that may be adversely affected are listed on the New Jersey or the National Register of Historic Places listed or are eligible for listing. “Adversely affected” can be as little as compromising the view from a neighboring property.
Anyone can look at the registers of historic places to see if a property is listed. More often, properties are not so listed. But an analysis cannot stop there, since an applicant must determine if the property is “eligible for listing”. That often takes an analysis, not by an environmental engineer, but by a “cultural resources consultant” working with the developer’s counsel. Determining if a property is eligible for listing is more of an art than an engineering analysis, as illustrated by the following highly subjective criteria for evaluation which are set forth in rules implementing the New Jersey Register of Historic Places Act (N.J.A.C. 7:4-2.3(a)(1)):
Criteria for Evaluation: The quality of significance in American history, architecture, archeology, engineering, and culture is present in districts, sites, buildings, structures, and objects that possess integrity of location, design, setting, materials, workmanship, feeling, and association, and:
(Criterion A) That are associated with events that have made a significant contribution to the broad patterns of our history; or
(Criterion B) That are associated with the lives of significant persons in our past; or
(Criterion C) That embody the distinctive characteristics of a type, period, or method of construction, or that represent the work of a master, or that possess high artistic values, or that represent a significant and distinguishable entity whose components may lack individual distinction; or
(Criterion D) That have yielded, or may be likely to yield, information important in history or prehistory.
As you can see from reading the criteria above, concluding that a property is or is not eligible for listing is a whole lot harder than determining if it is within a specific distance from the middle of a stream or from the edge of a wetland. However, failure to make the determination correctly can result in significant delays and penalties.
The upshot? Before the applicant can obtain the necessary state approval, the applicant must demonstrate that an unlisted property is or is not eligible for listing. That in itself can be a resource intensive effort. If it is eligible, the lawyer’s and cultural resource consultant’s real work is just beginning. Describing that work and the legal issues arising from it may be the subject for a future blog post.
Posted on December 4, 2015
Nearly 15 years have passed since the EPA effectively banned the residential use of the pesticide chlorpyrifos (often marketed under the name Dursban), which causes brain damage in children. Kids were exposed at home when they played on pesticide-treated rugs, or hugged pets wearing flea collars containing chlorpyrifos. Yet the agency’s decision left farmworkers and children in rural areas unprotected, as chlorpyrifos was still allowed in agriculture (often marketed under the name Lorsban). This organophosphate pesticide was, and still is, one of the most widely used in agriculture.
Last month, after a decision by the 9th Circuit Court of Appeals that called the EPA's delay "egregious," the EPA at last proposed to ban most agricultural uses of this toxic pesticide. If the ban on food use applications is finalized -- and it will surely be fought by the agricultural industry-- it will be a major victory for public health and farm communities.
Back in 2007, Earthjustice (which under full disclosure is my employer) began legal action to protect children, farmworkers, and rural communities from chlorpyrifos. Despite the clear evidence of harm, more than five million pounds of toxic chlorpyrifos were still being sprayed every year on soybeans, fruit and nut orchards, and other crops, putting hundreds of thousands of people at risk of exposure. Farmworkers who handled chlorpyrifos, even with safety gear, had been poisoned. (The new farmworker protection standards, which required more vigilant training and monitoring, among other things, should reduce such harms.) Their children risked exposure at home, as chemicals can linger on clothing. Not only farmworker communities, but anyone living downwind of farms could be exposed when the wind carried the toxic spray into their neighborhoods. Community monitoring even found chlorpyrifos in schoolyards.
The EPA was failing to protect children from pesticide drift; nor did the agency recognize the growing body of peer-reviewed, published research that found children exposed to the pesticide in the womb had serious brain impairments, including lower IQs and attention deficit disorder.
Over the next nine years, the EPA repeatedly missed deadlines to respond to the petition, and it relied on a questionable exposure model created by Dow, the manufacturer of the pesticide. (In 1995, Dow was fined $732,000 by the EPA for concealing more than 200 reports of poisoning related to chlorpyrifos.)
Only in response to multiple lawsuits, and a court decision that set a mandatory deadline for response, did the EPA at last take action. The public comment process and the finalization of the rule still remain, but at least the process has started. This is a great step forward. Moreover, the EPA is also reviewing all organophosphate pesticides, which are used in the United States and worldwide on a wide variety of crops from corn to cotton to nuts. The decision on chlorpyrifos should set a strong example.
Posted on December 3, 2015
Now six years old, the New Jersey Site Remediation Reform Act, (“SRRA”) was intended (among other things), to privatize most site remediation in the State. To that end, it empowers private, licensed individuals called “Licensed Site Remediation Professionals” (“LSRPs”), to conduct most site remediations and issue the administrative imprimatur of remediation completion (“Response Action Outcomes” or “RAOs”), without prior New Jersey Department of Environmental Protection (“NJDEP” or “DEP”) approval. Before SRRA was enacted, such certification was the exclusive province of the NJDEP.
The SRRA mandates LSRPs “exercise individual professional judgment”, which, in the view of LSRPs, actually empowers them to use such judgment. Underlying DEP regulations, however, require persons responsible for conducting remediations (i.e., the LSRP’s clients) to follow “any available and appropriate technical guidance concerning site remediation issued” by NJDEP, or provide a “written rationale and justification for any deviation from guidance.” In a blog posted June 20, 2013 dealing with a then-newly issued, quite prescriptive vapor instrusion guidance, I raised concerns that that guidance could indicate DEP was seeking to limit the ability of LSRPs to exercise professional judgment, by invoking the regulatory requirement to follow “guidance” (See A Case of the Vapors – Does New Jersey’s Newest Vapor Intrusion Technical Guidance Foreshadow a Return to the “Old Days” of Environmental Regulation in New Jersey?). Although detailed “guidance” is not promulgated by DEP in accordance with the same notice and comment process as are regulations – it can nonetheless constrain LSRPs from following the SRRA’s individual judgment mandate.
Unfortunately, more recent events seem to indicate NJDEP is, in fact, following such a restrictive policy. Whether it is doing so wittingly is open to question.
In fact, the DEP has found new ways to circumscribe the ability of LSRPs to perform remediations that do not follow DEP’s preferred script. For example, many remediated sites in New Jersey are subject to “restricted use” remedies which, most often, bar residential and similar uses of a site, in return for lesser cleanup standards. Such restrictions are most often accompanied by an “Institutional Control” containing a “use” prohibition and, often entail an “Engineering Control”, such as a cap. Both Institutional and Engineering Controls must be embodied in “deed notices” which must be filed in local property records. Ostensibly to ensure continuation of funding for such controls, SRRA established a requirement for obtaining Remedial Action Permits for soil, groundwater, or both, as a pre-condition to issuance of an RAO for the remedial action selected by the LSRP. Recently however, it appears that DEP has adopted a policy which holds that it must examine the entire remedy of a site for which controls are required before such permits will be issued, notwithstanding the fact that such sites will be the subject of an RAO provided by the LSRP. Such a review of remedies selected by the LSRP for RAOs on every site for which a Remedial Action Permit is required is antithetical to both the letter and spirit of the SRRA: it simply reproduces the pre-SRRA DEP way of doing things for such sites.
The LSRP community perceives this course of conduct by DEP as undermining LSRPs’ ability to exercise professional judgment, one of the key aspects (to them) of LSRP rights under the SRRA. Thus, there is talk of seeking the State legislature’s consideration of passage of an SRRA “2.0” that will curb these and other contrary policies initiated by the DEP. But the problem would seem to be one that cannot be addressed by legislation alone. That is, one wonders how any legislation, however mandatory or precise, can negate what is essentially an (understandable) antipathy by DEP personnel to a law that curbs their power and threatens to render many aspects of their programs superfluous.
One of the goals of the SRRA was to ameliorate the injury done to New Jersey’s image by the perception that the DEP was a rigid, unreasonable, and delay-ridden institution, constituting one reason why the State’s business climate has often been annually ranked at or near the bottom when compared to other states. Any return to the DEP’s prior “command and control” site remediation regime is contrary to that goal; but the old system is not going away gently, if it is going away at all.
Posted on December 2, 2015
Last week, the Boston Globe had an op-ed by Joshua Goldstein and Steven Pinker concerning some “Inconvenient truths for the environmental movement.” I’m sorry to say that I agree with pretty much every word of it. Why am I sorry? Because Goldstein and Pinker make clear – even though they don’t mention his name – that the Pope was completely wrong in his prescription for addressing climate change. How so? It’s really pretty straightforward.
People want more economic development, not less. They want more markets, not less. It may be that some wealthy societies could still have a relatively smooth transition to renewable fuels without sacrificing economic growth. Unfortunately, that’s not where we have to address the demand for fossil fuels. We have to do so in China and India and other developing countries. I’m sorry, but I’ve seen the projected demand for fossil fuels outside the US and Europe and it’s not pretty. Anyone who thinks that we can quickly and easily eliminate fossil fuel use in those countries and still allow them the economic growth that their citizens demand is delusional.
Which brings us to Goldstein’s and Pinker’s second inconvenient truth; nuclear power has to be a large part of the solution. And I’m afraid that’s probably the end of the conversation for many of my environmental friends, so I’ll cut this short.
I’m still an optimist. I believe that we can still solve climate change. We can do so however, with more use of markets, not less. And we must do so with more economic growth, not less, because the rest of the world won’t be satisfied with less.
Posted on November 30, 2015
As we left off, the New Jersey Supreme Court ruled that in obtaining easements to build dunes, the amount of compensation for the partial loss of ocean view would have to take into account a credit for the benefit afforded by the dunes’ protection.
When the New Jersey Department of Environmental Protection, in carrying out Governor Christie’s program to construct a $3.5 billion dune system to protect its 127 mile coastline, decided to acquire the necessary easements by administrative actions, the City of Margate in Atlantic County challenged the failure to proceed by eminent domain: U.S. District Judge Bumb agreed with Margate and invalidated this mechanism, ordering the Department to proceed with eminent domain in state court.
Ten months later, New Jersey Superior Court Judge Mendez took under consideration two issues: (1) the reasonableness of the use of eminent domain to acquire easements from 10 private lot owners and 87 city-owned lots, and (2) instead of his making a summary ruling, the need to allow Margate to have an evidentiary hearing, citing the two referenda in which Margate’s voters voted to oppose the dunes.
Once Judge Mendez rules, I will update this matter, keeping in mind that the author owns a 10th floor condominium in Margate, the Municipality Governor Christie calls the most “selfish” municipality in New Jersey.
Posted on November 17, 2015
In a string of recent decisions, the U.S. Court of Appeals for the District of Columbia Circuit appears to be shifting away from the long-standing general presumption that standing is self-evident for target entities of a regulatory program — Coalition for Responsible Regulation, Inc. v. EPA, Grocery Manufacturers Ass’n v. EPA, Alliance of Automobile Manufacturers v. EPA, and Delta Construction Company v. EPA.
In Coalition for Responsible Regulation v. EPA, the D.C. Circuit held industry had “failed to establish that the [Greenhouse Gas] Rules caused them ‘injury in fact,’ [or that] injury … could be redressed by the Rules’ vacatur.” The court found that although “Industry Petitioners contend[ed] that they are injured because they are subject to regulation of [GHGs],” they lacked standing because several aspects of “the … Rules … actually mitigate Petitioners’ purported injuries.”
In Grocery Manufacturers and Alliance of Automobile Manufacturers, EPA decisions concerning the ethanol regulatory program were challenged by a multitude of trade groups – automakers, oil companies, food suppliers – each claiming its members were harmed by the regulations. In twin decisions separated by over two years, the D.C. Circuit held none of this broad universe of industry petitioners had standing to challenge EPA’s actions.
In Delta Construction Company v. EPA, the D.C. Circuit held all petitioners lacked standing to seek remand of EPA’s Greenhouse Gas (“GHG”) emission standards for heavy-duty trucks. Some Petitioners had attacked the Rule because the emission standards would drive up the price of the trucks they purchased; another Petitioner alleged the rule made its products—modified diesel engines to run on vegetable oil —“economically infeasible.” The Court found the Purchaser Petitioners’ standing failed on both the causation and redressibility prongs of the standing test. The Manufacturer Petitioner was determined not to fall within the “zone of interests” intended to be protected by the Clean Air Act.
These four D. C. Circuit rulings all found technical defects in the industry petitioners’ standing. They may signal a lasting shift away from the basic assumption that a regulated industry has standing to challenge regulations aimed at its activities.
Given this new, strict scrutiny of industry standing, practitioners would be well advised not to take for granted the standing of their clients. In the docketing statement for a regulatory challenge, industry counsel should substantively focus on the “brief statement of the basis for the … petitioner’s claim of standing” and reference materials in “the administrative record supporting the claim of standing.”
Posted on November 13, 2015
For those of you who are becoming exhausted by the opinions in the Fox River case, it is time to suggest that the fundamental underpinning of the case – the toxicity of PCBs to humans and to fish – may be in jeopardy.
Twice under the auspices of the World Health Organization “consensus toxicity factors” for dioxin-like compounds including PCBs have been published. These factors were based on analysis of laboratory animals, typically rodents. The lead author of both reports was Martin van den Berg.
Recently an article was published in Chemical Research in Toxicology, “Consensus toxicity factors for PCPDs, PCDFs, and PCBs combining in silico models and extensive in vitro screening of AhR-mediated effects in human and rodent cells,” where van den Berg was the second author on the article who reported on the results of dosing human cells with PCBs and found that PCB 126 was the only PCB congener that produced a measurable response from human cells and that the result was more than 30 times lower than the WHO TEF value for PCB 126. Similar results have been reported in other papers.
As to fish, T.B. Henry has recently published analysis in Critical Reviews in Toxicology , “Ecotoxicology of polychlorinated biphenyls in fish – a critical review.” He concludes: “Biological activity of PCBs is limited to a small proportion of PCB congeners [e.g., dioxin-like PCBs…] and occurs at concentrations that are typically orders of magnitude higher than PCB levels detected in wild fish… Overall, there appears to be little evidence that PCBs have had any widespread effect on the health or survival of wild fish.”
What would the District Court and the Seventh Circuit make of this adjustment to the facts of the case?
Posted on November 12, 2015
On November 3, 2015, President Obama issued a Presidential Memorandum establishing policies that are a significant departure from existing practice regarding compensatory mitigation for effects to natural resources from most federally approved projects. The Memorandum, entitled “Mitigating Impacts on Natural Resources from Development and Encouraging Private Investment,” applies to all permits and authorizations issued by the Department of Defense (e.g., the U.S. Army Corps of Engineers), the Department of Agriculture (e.g., the Forest Service), the Department of Interior (e.g., BLM, USFWS, Bureau of Ocean Energy Management, etc.), EPA and National Oceanic and Atmospheric Administration (e.g., National Marine Fisheries Service (NMFS) ), including actions taken by USFWS and NMFS pursuant to the Endangered Species Act. Although it cannot be known today how the new policies will ultimately be implemented, the Memorandum is, at least as written, both anti-development and potentially draconian.
The new Memorandum states that it is establishing certain policies premised upon “a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them.” In furtherance of this moral obligation, the President has established it to be the policy of the identified federal bodies (and all bureaus and agencies within them):
· To avoid and to minimize harmful effects to land, water, wildlife and other ecological resources (natural resources), and to require compensatory mitigation for, the projects they approve.
· To establish a net benefit goal or, at a minimum, a no net loss goal for mitigation of the natural resources each agency manages that are important, scarce or sensitive.
· To give preference to advance compensation mechanisms in establishing compensatory mitigation. “Advance compensation” is defined to mean a form of compensatory mitigation for which measurable environmental benefits (defined by performance standards) are achieved before a given project’s harmful impacts to natural resources occur. This policy preference appears to somehow contemplate that compensatory mitigation will be achieved before the project is constructed and operated.
· To use large-scale plans to identify areas where development is most appropriate, where natural resource values are irreplaceable and development policies should require avoidance, and where high natural resources values result in the best locations for protection and restoration.
The Memorandum also establishes certain deadlines for action, principally by the agencies of the Department of Interior (e.g., one year deadline for BLM to “finalize a mitigation policy that will bring consistency to the . . . application of avoidance, minimization and compensatory actions [f]or development activities and projects impacting public lands and resources.”; one year deadline for USFWS to finalize compensatory mitigation policy applicable to its Endangered Species Act responsibilities).
Some federal laws (e.g., Clean Water Act Section 404 permitting for filling of waters of the United States) already have well-developed compensatory mitigation programs; however, most federal permitting schemes have not been interpreted or implemented to authorize or require compensatory mitigation, let alone at no net loss or net benefit levels. Accordingly, to the extent that the Memorandum is intended to require net benefit or no net loss compensatory mitigation through many/most federal permitting programs, such a directive would be a significant departure from existing practice, of untested legality, and arguably contrary to existing law.
Moreover, to demonstrate that compensation has occurred at a net benefit or no net loss, unless the adverse effects are offset through generation or preservation of in-kind resources (e.g., a duck for a duck), the “damage” to affected natural resources must first be valued. Accordingly, if implemented so that compensatory mitigation is broadly required, the policy could lead to an extensive, time consuming and complicated valuation process. One worst case scenario would be for this policy to result in some form of new natural resources damages assessment, the time and expense for which would be challenging to rationalize in the context of a development proposal where cost and time are relevant (i.e., for every development project).
Unless the Memorandum is rescinded or feebly implemented, or its implementation is held unlawful, it has significant strategic, permitting, legal and financial implications for many, if not most, major development projects. Of course, it is likely to be difficult or impossible to challenge the new policies established in the Memorandum, except on a project-by-project permit-by-permit basis. As such, the pressure for project proponents to navigate (rather than litigate) the new policies will be substantial.
Posted on November 3, 2015
The Clean Water Act’s judicial review provision is bizarrely phrased and at times impenetrable. It can force litigants into lengthy threshold battles over jurisdiction that delay and sideline the actual challenges to EPA’s action. Nowhere is this better showcased than in the recent litigation over EPA’s new definition of “waters of the United States” (“WOTUS”). Companies, industry groups and public interest organizations have filed dozens of suits in district and circuit courts across the country to cover all the possible jurisdictional possibilities. The circuit court cases were filed under the Clean Water Act’s judicial review provision that automatically centralizes the cases in a randomly selected circuit court (here, the Sixth Circuit). The district court cases were filed under the Administrative Procedure Act, which contains no mechanism for consolidating the numerous cases.
In a heroic attempt to combine the district court cases and litigate in only one court, EPA looked to the multidistrict litigation process designed for coordinated discovery among cases sharing common facts. The circus that ensued was a mini-caricature of the WOTUS litigation and highlighted the intrinsic problems with the Clean Water Act’s judicial review process. The hearing before the multidistrict litigation panel began at 8:00 a.m. in a large courtroom filled beyond capacity with hundreds of lawyers representing the litigants in the fifteen matters scheduled for oral argument that day. Clerks of the court spread across the room calling each matter, and lawyers fought through the crowd to form a bunch in front of their clerk, struggling to hear over the noise. The clerks doled out oral argument time in minute increments, giving some lawyers as few as two minutes of argument time. Once the schedule was set and after a brief recess, the panel called each of the thirteen cases preceding the WOTUS matter on the docket – the Amtrak derailment, airline anti-trust, various medical device and product liability matters, etc. – moving from one matter to the next with seamless agility.
DOJ (Martha Mann) presented oral argument for EPA, and met with stiff resistance from the panel. The panel challenged EPA’s attempt to fit an APA case, to be decided on the record and the law with minimal discovery, into the MDL process designed mostly for coordinated discovery. Ultimately the panel commended Ms. Mann for a noble effort in an exceptionally uphill battle. Elbert Lin, the Solicitor General of West Virginia, presented argument for the plaintiffs and, sensing the favorable persuasion of the panel, highlighted only the diverse procedural postures of the various matters. The various jurisdictional and preliminary injunction rulings in the district courts and an appeal already before the 11th Circuit would all greatly complicate any attempted consolidation.
On October 13th, the panel issued its ruling, deciding not to consolidate the district court cases. The panel agreed that not only was the MDL process not applicable to the predominantly legal WOTUS challenges, but consolidation would only further complicate the already chaotic litigation.
Jurisdictional questions are now pending before the 6th and 11th Circuit Courts of Appeals. The 6th Circuit offers EPA its last hope of litigating the WOTUS challenges in one court. If the 11th Circuit were to disagree, the jurisdictional issues could continue to eclipse the merits of the litigation for months, if not years, pending final resolution by the Supreme Court.